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Investing.com-- China’s economy is on track to achieve its growth target in at least the first half of 2025, ING analysts said, citing some resilience in consumer spending and a modest impact from a U.S. trade war.
ING said economic readings for May showed the “economy has actually held up relatively well year-to-date,” with exports remaining strong, retail sentiment improving, and industrial production still in expansion.
“Barring an unexpected deterioration in the June data, it’s likely that China remains on track to achieve its growth target in the first half of 2025. We move our 2025 GDP forecast back to 4.7% YoY,” ING analysts said, although their target was still below China’s 5% target.
ING’s note comes just hours after China logged stronger-than-expected retail sales growth in May, but posted below-consensus growth in industrial production and fixed asset investment.
ING said Chinese retail strength was an “encouraging sign of recovery, as policy support efforts filter through to the economy.”
But the brokerage noted that a more sustainable recovery in consumption, which is a key economic engine for China, will require a turnaround in consumer confidence.
ING said China’s manufacturing growth remained resilient in May, as large-scale industrial goods also clocked strong output. But China’s low-end manufacturing, especially those of consumer goods, may be facing a greater impact from U.S. tariffs.
President Donald Trump had signed orders plugging a loophole that allowed low-value Chinese goods to be exempted from trade tariffs.
ING noted that China’s industrial growth had slowed “modestly” due to the tariff impact.
They noted that weakness in fixed asset investment growth reflected heightened uncertainty around investor sentiment towards China, while a property market downturn likely worsened in the first half of the year.