Morgan Stanley Leads Wave of Upgrades to China 2025 Growth Outlook

Morgan Stanley has raised its forecast for China’s economic growth in 2025 to 4.8% from 4.5%, becoming the third major global bank in two days to revise its projections upward after a stronger-than-expected second-quarter GDP reading. Barclays on Tuesday lifted its 2025 outlook to 4.5% from 4%, while UBS now expects growth of 4.7%. The raft of upgrades narrows the gap with Beijing’s medium-term target of about 5% and signals growing confidence that the world’s second-largest economy can sustain momentum despite lingering property-market weakness and deflationary pressures. China’s economy expanded 5.2% year-on-year in the April-to-June period, topping the 5.1% consensus, and grew 1.1% from the previous quarter. In nominal terms, output rose 3.9% as consumer prices fell 0.1% in the first half and producer prices dropped 2.8%. Analysts cited the resilient mid-year data, ongoing fiscal support and expected policy easing as the main drivers behind their higher 2025 growth forecasts.