China 2020 GDP forecast raised to 2.4 per cent: HSBC Global Research

Mainland China’s rebound accelerates as HSBC Global Research raises GDP growth forecast from 1.7 per cent to 2.4 per cent.

Infrastructure and property investment seem set to be the most important drivers of GDP growth, according to the banking corporation.

Private consumption, however, is likely to continue to lag behind as demand has yet to pick up.

"Households facing job-market uncertainty are saving more and likely to stay cautious as virus risks remain", Chief China economist Qu Hongbin reported. 

"We thus expect year-on-year rises in retail sales of only 1.3 per cent in the third-quarter and 6.3 per cent in October-December."

Infrastructure investment has recovered sharply, funded by 4.75 trillion renminbi (AUD947 billion) of special government bonds, and is set to grow by 15 per cent compared with a year earlier.

Fuelled by credit availability and a quick recovery in real estate transactions, property investment has experienced a similar rebound.

Hongbin noted the government deficit, 3.3 per cent of GDP in the first half of this year, is likely to increase to 7.7 per cent in the second half.

This will provide strong support for further economic recovery.

The HSBC report noted the banking corporation still expect 7.5 per cent growth next year.