FOREIGN institutions have raised their forecasts for China’s economic growth this year amid the nation’s better-than-expected first-quarter performance, strong policy stimulus and resilience in exports, the China Daily reported on Wednesday.

While Barclays recently revised upward its China GDP forecast from 4.4% to 5%, the World Bank readjusted its expectations from 4.5% to 4.8%.

China’s economy is on track for a steady rebound and the nation is poised to meet its preset annual growth target of around 5%, analysts said.

As the economy is still facing headwinds from lackluster demand and mounting external uncertainties, some economists called for stepped-up fiscal support to boost domestic demand.

Zhang Xiaoyan, associate dean of Tsinghua University’s PBC School of Finance, was quoted by China Daily as saying that the country’s around 5% annual GDP target is highly achievable.

“We’re slowly coming out of the negative shock (of the COVID-19 pandemic), and the economy is recovering,” Zhang said, adding that technological innovations, in sectors such as artificial intelligence and industries facilitating the nation’s green transformation will serve as new growth engines.

Yao Yang, director of the China Center for Economic Research at Peking University, said the nation’s annual growth target of around 5% is feasible. “The government needs to further boost demand,” he said, suggesting an increase in government spending.

China has already announced a series of measures to boost demand, including issuing 1 trillion yuan (US$138 billion) worth of ultra-long-term special treasury bonds this year as well as encouraging large-scale equipment renewal and trade-in deals for consumer goods.

Last week, the National Development and Reform Commission and four departments jointly released a document mapping out measures to boost consumption in sectors such as tourism, automobiles and electronics.

Daniel Zipser, senior partner at management consultancy McKinsey & Co, said that China’s consumption “has seen a moderate recovery so far and we anticipate this trend to continue.”

Analysts said that China is on the right track in dealing with the troubles of its property sector with policy boosts.

Robin Xing, chief China economist at Morgan Stanley, said that China’s policies are moving in the right direction. “Nominal growth is likely to remain steady in 2024 and improve modestly in 2025.”

The housing buyback initiative, if implemented smoothly, could improve developers’ liquidity and increase public housing supplies, Xing said.

(SD-Agencies)