摩根史坦利 Cutting Nominal GDP to 3.9% for 2024 and 2025

As consumer demand falls amid a deflationary spiral, we cut our real GDP forecasts to 4.6% and 4.2% for 2024 and 2025, with a negative GDP deflator throughout the period (-0.7% in 2024 and -0.3% in 2025). Beijing is considering fiscal support for housing and social welfare, but progress is slow

Key Takeaways
1）The downward revision puts our 2024/25 nominal GDP forecast well below consensus.
2）August economic data affirmed a deepening deflation loop amid housing and LGFV deleveraging, with the labor market fast deteriorating.
3）We expect incremental monetary easing in Sep-Dec, but a deficit expansion is still under debate.
4）Beijing may be turning more receptive of shoring up housing and social welfare with fiscal policy, but policy pivot may be gradual