Citi has lowered its projection for China’s GDP growth in 2025 to 4.2%, down from an earlier estimate of 4.7%, as external risks mount and trade conditions deteriorate.The brokerage attributed the downgrade to a combination of rising geopolitical tensions, weakening exports, and the potential fallout from high tariffs.
It estimates that elevated tariffs could shave at least 1.5 percentage points off China’s annualised growth, with an additional hit of around 0.6 percentage points expected in 2025.
ALSO READ: China vows to ‘fight to the end’ if US insists on new tariffsCiti noted that there is limited room for progress on the diplomatic front following recent escalations between major global powers, further clouding China’s trade outlook. Export growth could slip into negative territory as early as April, it warned.
It estimates that elevated tariffs could shave at least 1.5 percentage points off China’s annualised growth, with an additional hit of around 0.6 percentage points expected in 2025.
ALSO READ: China vows to ‘fight to the end’ if US insists on new tariffsCiti noted that there is limited room for progress on the diplomatic front following recent escalations between major global powers, further clouding China’s trade outlook. Export growth could slip into negative territory as early as April, it warned.
In response to these pressures, China is likely to rely more on domestic policy support. Citi expects the central bank to cut policy rates by 40 basis points and lower the reserve requirement ratio (RRR) by 100 basis points to boost demand and stabilise growth.
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(Edited by : Asmita pant)
