Morgan Stanley upgraded its forecast for China’s economy in 2023 in a report published on Wednesday.
“We lift our already above-consensus GDP growth forecast to 5.4%,” strategists and economists said in the paper. The company had previously predicted 5% growth for next year.
“Investor positioning in China’s assets is still low and this recovery is not fully priced in equity and FX markets,” the note said, adding that the revision reflects a rebound in activity that is projected to occur sooner than planned.
“We had previously expected a rebound in activity to materialize from late 2Q23. Now we are projecting mobility to improve from early March,” it said.
According to the report, further relaxation of restrictions will certainly result in a considerable increase in Covid instances, albeit the firm believes the impact will be short-lived.