Economic Outlook for China Slightly Brightens

The economic outlook for China has slightly improved in February 2015. The CEP Indicator, which reflects the expectations of international financial experts regarding China's macroeconomic development over the next twelve months, increased by 7.6 points to a new level of 0.0 points in the current survey period (February 9-26, 2015). In the previous month, the CEP Indicator was negative for the first time since the start of the survey in mid-2013.

The participants correctly anticipated the most recent reduction of major policy rates by the People's Bank of China. The latter came into effect shortly after the survey period ended. However, the analysts had expected the reduced one-year deposit rate of 2.5 per cent not until the end of the year. Similarly, the new one-year lending rate of 5.35 per cent comes close to the analysts' current twelve-months-forecast of 5.3 per cent. The interest rate cuts may spur renewed increase in economic expectations in March 2015. 

After an increase by 3.8 points, the balance of positive and negative assessments regarding the current economic situation in China also ranks at 0.0 points. The analysts' average forecast for the real Chinese GDP growth rate in 2015 stays at 7.1 percent. For 2016, the participants now expect a growth rate of 6.9 per cent.

For more information please contact

Dr. Oliver Lerbs, Phone: +49 (0)621-1235-147, Email: lerbs@zew.de

Professor Michael Schröder, Phone: +49 (0)621-1235-140, Email: schroeder@zew.de