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China's economy is expected to get off to a smooth start this year as agencies raise their growth forecasts


Domestic and foreign institutions have recently upgraded their forecasts for China's economic growth this year, signalling confidence in the country's prospects.China's economy is on track to get off to a smooth start with a slew of high-frequency monitoring data showing that the manufacturing purchasing managers' index for the first month of the year, due next week, is likely to remain in expansionary territory for three months in a row.

The international monetary fund released its latest quarterly world economic outlook on Monday, forecasting global growth of 3.3 per cent in 2020, down 0.1 percentage point from its October forecast.But it raised its 2020 growth forecast to 6 per cent from 5.8 per cent.

"China's economic growth is expected to moderate in the coming years. This is mainly due to the structural adjustment taken by the Chinese economy to shift from a demand-led economy to one driven by domestic demand."Gita gopinath is the IMF's chief economist.

Foreign ministry spokesperson geng shuang said the IMF's upward revision of China's economic growth forecast shows the international community's recognition of China's economic performance and confidence in China's economic prospects.

According to the latest data from the national bureau of statistics, China's GDP grew by 6.1 percent year on year in 2019, one of the highest among major economies in the world, with per capita GDP exceeding us $10,000.China's GDP is expected to account for more than 16 percent of the world's total, and China's contribution to global growth is expected to reach about 30 percent.

Many domestic institutions have also upgraded their economic forecasts for this year.A clearer outlook for external demand will help boost export demand and manufacturing investment, while the policy of stabilizing growth will be stepped up and downward pressure on the economy may ease, cicc said.Cicc raised its forecast for China's economic growth this year to 6.1% from 5.9%.

Huatai securities' macro research team is more optimistic.Li chao, chief macro analyst at huatai securities, thinks the economy may grow at around 6.2% this year, and that growth in the first quarter may pick up slightly from the fourth quarter of last year.

The national bureau of statistics will release PMI data for the first month of the year next Friday.The manufacturing PMI is widely expected to remain above the 50 per cent line separating expansion from contraction in January.

In an interview with Shanghai news, tang jianwei, chief researcher at bocom, said the manufacturing PMI may show a seasonal decline due to factors such as the approach of the Spring Festival.However, faster profit growth at industrial companies is helping to fuel the improvement in corporate economic expectations.The manufacturing PMI is expected to be around 50.1 per cent in January, slightly lower than the previous month.

As a leading indicator of the economy, the manufacturing PMI continued to expand, indicating that the economy is stabilizing and picking up.Since the beginning of 2020, the national and local policies for steady growth have also been strengthened.Analysts believe that the relevant policy effect or in the first quarter of the show.

"Since the beginning of this year, local governments have been issuing 1 trillion yuan of new special bonds for 2020 approved in advance by the ministry of finance at a relatively fast pace, and infrastructure investment is expected to rebound significantly in the first quarter," li said.

Data show that the actual issuance of special bonds at the beginning of this year is significantly stronger than the same period last year.In terms of scale, by January 16, the actual issuance of special bonds had reached 417.3 billion yuan, nearly three times that of January last year.From the perspective of structure, the focus of this round of special bond issuance has shifted from land storage and shanty reform to the field of infrastructure construction, which plays a stronger role in supporting the economy.

Cheng shi, chief economist at icbc international, expects the strong start of special debt to lead to steady strength in infrastructure investment, which is expected to grow at around 6% in the first quarter, up from 3.8% last year.

He stressed that on the basis of last year's stable economic end, the two major engines of export and infrastructure are simultaneously powering up, and the Chinese economy is expected to achieve a "good start" this year, which will lead to a further expected recovery in the market.

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