UBS Lowers China Growth Forecasts Amid Deepening Property Downturn

Swiss investment bank UBS has revised its forecasts for China’s economic growth, expecting further slowdown due to worsening conditions in the property market. Following a continued weakness in the real estate sector, UBS predicts that the country's GDP growth rate for 2024 will be 4.5%, a significant drop from the previously expected 5%. The bank also highlighted that declining real estate sales and the deteriorating financial position of developers create uncertainty in the business environment.

This downgrade came amid growing concerns over the debt burden faced by major developers such as Country Garden, which are struggling with debt repayments and witnessing plummeting property prices. UBS noted that if the situation does not improve, it could lead to more serious consequences for the economy, including reduced investments and consumer spending.

Analysts point out that the Chinese government is already taking actions to stabilize the market. However, even with fiscal stimulus measures and various support programs for the real estate sector, the main issue remains unresolved — the slow growth of confidence among consumers and investors, which is crucial for revitalizing the sector.

UBS expects that recovery will only be possible in 2025, provided that government measures lead to an improved overall economic backdrop and consequently increased public confidence. Until then, the market is likely to remain in a state of low activity and uncertainty.

The downgrade in economic forecasts reflects wider issues within a system already under pressure, as global markets are closely watching developments in China, given its significant implications for the global economy.

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