China: Supportive policy but slower growth – BNP Paribas

BNP Paribas economists note Chinese GDP growth at 5.0% year-on-year in Q1 2026, after 5% in 2025, and expects a moderate slowdown in 2026. They highlight a K-shaped pattern with strong exports but weak domestic demand and ongoing property sector stress. Authorities are seen maintaining modest fiscal and monetary support as deflationary pressures ease in 2026.

K-shaped growth with modest policy support

"Economic growth accelerated to +5.0% y/y in Q1 2026, vs. +4.5% in Q4 2025."

"It stood at 5% in 2025 as a whole and it is expected to slow moderately in 2026."

"Growth remains characterized by a K-shaped trajectory."

"The authorities will maintain supportive fiscal and monetary policies, but their measures will continue to be modest, even in a less supportive global environment."

"Deflationary pressures are expected to decline in 2026, notably thanks to higher global energy prices and anti-involution measures implemented by the authorities."

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