Nomura Expects Stronger GDP Growth in China by Q4 2024

Forex - Nomura economists forecast that China will experience stronger GDP growth in the fourth quarter as the authorities' stimulus efforts begin to yield results. Nomura raised its fourth-quarter GDP growth estimate from 4.4% to 4.9%, thanks to measures such as the "cash-for-clunkers" trade-in program that encourages consumers to trade in old vehicles and appliances. Nomura noted that "improvements in new home sales, a rebound in export growth, and increased stock trading activity will provide further support for growth," and adjusted its annual GDP growth estimate from 4.7% to 4.8%. However, they cautioned that the recovery may be short-lived due to the lack of real fiscal stimulus beyond the debt swap program announced for local government debts last week. Nomura also mentioned that the U.S.'s additional tariffs could further negatively impact the Chinese economy, while maintaining its GDP growth forecast of 4.0% for 2025 and recognizing the risk that growth may slow again in the first quarter of 2025.