HSBC has lowered its forecast for the economic growth of Asian countries (outside Japan) for the second half of the year from 7.8 percent to 7.4 percent due to new COVID-19 cases and weakened demand.
In recent months, some Asian countries, especially India, have faced challenges in their economic recovery from the prolonged pandemic, which made HSBC adjust its estimates.
“India’s third wave (of new COVID-19 cases) remains a risk for the country,” Herald van der Linde, head of equity strategy for Asia-Pacific at HSBC, told a news conference in Hong Kong on Tuesday.
The Chinese mainland’s economy will recover gradually due to strong demand and a good export performance, as well as larger manufacturing investments, said Qu Hongbin, chief economist for Greater China at HSBC
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However, with the pace of vaccine rollouts, increasing consumption will contribute to economic recovery in Asia next year, and Singapore, South Korea, and Japan will benefit most from the vaccination effort, according to Frederic Neumann, co-head of Asian economics research at HSBC.
The Chinese mainland’s economy will recover gradually due to strong demand and a good export performance, as well as larger manufacturing investments, said Qu Hongbin, chief economist for Greater China at HSBC. Demand for real estate will drop in the second of the year due to tightened regulations, he added.
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Meanwhile, the risk of inflation in the mainland remains limited. Qu said that: “the mainland’s Producer Price Index will peak in the coming months, and then slow down at the end of year. The Consumer Price Index will remain below 2 percent, which means the People’s Bank of China would probably not increase key policy rates or tighten liquidity.”
HSBC estimates the mainland’s GDP growth will slow to 6 percent due to the low-base effect in the second half of 2021, while the World Bank on Tuesday raised its expectations for growth from 8.1 percent to 8.5 percent.
The World Bank forecasts that the mainland’s economic growth will slow to 5.4 percent, as its advantage of rebounding the earliest from the pandemic disappears.