Amundi lifts China growth forecasts | Australian Markets

Europe’s main asset supervisor has forecast a modest uplift in China’s GDP growth, because the US strikes to de-escalate its trade fracas with its second-biggest trading companion.

Amundi’s latest estimate offers China a 40-basis-point raise in GDP growth for 2025, hitting 4.3% (up from 3.9% in its earlier forecast). For the next yr, the world’s second greatest economic system is predicted to succeed in 3.9% GDP growth, up from Amundi’s beforehand forecast 3.7%.

Amundi stated latest US-China trade talks have “exceeded expectations”, noting that within the 145% tariff, the retaliatory 91 proportion level levy, initiated by the US on 8 April, has been absolutely eliminated, not merely suspended.

The consequence of US-China trade talks has now considerably decreased the probability China will provoke further fiscal stimulus in Q3, Amundi stated, with the 90-day pause “[buying] enough time through mid-August” for the nation’s coverage fee setter, the People’s Bank of China (PBoC).

“Amundi maintains its forecasts that PBoC will proceed with two further 10bp fee cuts in July and September.

“As April CPI/PPI shows, deflationary pressures have been persistent, and further monetary easing is much needed regardless of the results of the negotiations,” stated Amundi Investment Institute strategist Claire Huang.

She cautions, nonetheless, that whereas the tightening in international financial situations “was brief and has since normalised… uncertainty surrounding trade policy remains elevated, continuing to weigh on private sector confidence”.

As such, Huang added, tariff insurance policies are “likely to have lasting effects”.