KONTAN.CO.ID - NEW YORK. JP Morgan, Citigroup and Nomura on Wednesday lifted their forecast for China's economic growth for the year following upbeat data, but highlighted the need for more stimulus. Data on Wednesday showed China's gross domestic product (GDP) rose at a faster-than-expected 4.9% in July-September from a year earlier, and along with data showing a rise in consumption and industrial activity in September, suggested a tentative recovery thanks to a recent flurry of policy measures. Third-quarter growth was, however, slower than the 6.3% expansion in the second quarter.
Citigroup now expects China's GDP to grow 5.3% in 2023 from 5% earlier, while JP Morgan and Nomura see it at 5.2% and 5.1%, respectively. Goldman Sachs trimmed its forecast to 5.3% from 5.4%, still higher than Beijing's official target of a 5% growth for the year. "Like August, September monthly activity came in stronger than expected. This is encouraging," JP Morgan economists, led by Haibin Zhu, said. JP Morgan expects the economic momentum to persist in the coming months. Read Also: China's Q3 GDP Growth, September Activity Show Economic Recovery Gaining Traction MORE STIMULUS NEEDED However, weak growth in nominal GDP - which includes inflation effects - suggests that the earnings and profit outlook will remain a hurdle in the path to the recovery in private investment, JP Morgan said. This points to the need to step up stimulus and reforms to "decisively fend off a debt-deflation loop," economists at Morgan Stanley led by Jenny Zheng, said. Since the 5% growth target looks achievable, policy space could be saved for next year, Zheng said.