China: Growth projected to moderate – DBS

DBS Group Research economists Byron Lam and Daisy Sharma highlight that China’s 1Q 2026 real Gross Domestic Product (GDP) rose to 5.0% year-on-year from 4.5% in Q4 2025, supported by strong external demand but uneven domestic momentum. Their GDP Nowcast model points to a slowdown to 4.5% in 2Q, with industrial activity, exports and retail sales weakening, while credit and fixed asset investment remain subdued. They also expect China’s GDP growth to moderate to 4.5% in 2026, noting downside risks from geopolitical tensions in the Middle East, higher energy prices and supply chain disruptions.

DBS sees slower China growth ahead

"Today we focus on China’s 1Q real GDP which rose from 4.5%yoy in Q4 2025 to 5.0%, starting the year with a solid footing."

"Industrial activity remained well supported by strong external demand, while domestic momentum stayed uneven, with consumption, investment, and credit growth subdued amid persistent property sector stress and ongoing capacity reduction efforts."

"As per our Nowcast model, GDP growth is projected to moderate to 4.5% in 2Q."

"The slowdown in growth will be led by weaker industrial activity, exports, and retail sales."

"We expect China’s GDP growth to moderate to 4.5% in 2026."

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