Paul Gruenwald, global chief economist at S&P Global Ratings, says that the current state of affairs in the Chinese real estate market is the biggest factor of risk in reducing the economic growth target of this Asian country and notes that Beijing does not seem to be going to make any significant changes to overcome the present situation.
The mentioned expert also stated that a kind of restraint of the Chinese authorities in the context of readiness for radical measures to adjust the specified system of conditions and circumstances is due to the limited scale of the impact. In this case, it is implied that Beijing can only take such measures, the territory of the force which will not extend far beyond the space of the Asian country’s economic system.
Paul Gruenwald says that China has savings to deal with the crisis in the real estate market. In the relevant context, the expert noted that it’s not really spilling over too much to the rest of the world.
Paul Gruenwald suggests that no external or market pressure will force Beijing to deal with the property excesses. According to the expert, over time, China may begin to take measures aimed at solving the relevant problem, but the bottom has not yet been out.
In May, Beijing unveiled a set of large-scale measures aimed at improving the situation in the real estate market, which plunged into crisis after the default by Evergrande Group in 2021. At the same time, experts assessed the relevant solutions as insufficient.
In June, S&P Global Ratings revised its forecast for China’s gross domestic product (GDP) growth in 2024 upward. Experts of this agency expect that the corresponding indicator will increase by 4.8% in the current year. The previous version of the forecast provided for GDP growth of 4.6%. At the same time, the target of the Chinese authorities is around 5%.
As we have reported earlier, China Faces Growth of Deflation Risk.
