China: Growth seen improving in 1Q – DBS

DBS Group Research economists Byron Lam and Daisy Sharma present a China GDP Nowcast indicating real GDP growth likely improved to 4.7% in 1Q 2026 from 4.5% in Q4 2025. They highlight solid early‑year data, with industrial activity and external demand supporting growth, while consumption is stable and investment and credit remain weak. Annual GDP growth is expected to moderate to 4.5% in 2026.

Nowcast points to stronger first quarter

"This week’s featured insight is GDP Nowcast, which is best viewed as an estimate of real GDP growth based on available economic data and forecasts for the current quarter."

"Monthly data releases for Jan-Feb show that China has started 2026 on a solid footing."

"As per our Nowcast model, GDP growth is projected to improve to 4.7% in 1Q from 4.5% in Q4 last year."

"Growth in Q1 will be supported by strong industrial activity and external demand for Chinese goods, while consumption remained broadly stable."

"We expect China’s annual GDP growth to moderate to 4.5% in 2026 (5.0% in 2025). Meanwhile, geopolitical tensions in the Middle East and higher oil prices, specifically Brent averaging USD100 in rest of the year, present mild downside risks to China's growth, potentially leading to a 0.5ppt fall in GDP."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)