Fitch Ratings raised its forecast this week for China’s economic growth next year, based on increased domestic demand and expectations for coronavirus vaccine deployment.
Fitch now expects China’s gross domestic product to expand 8% in 2021, up from the 7.7% rate forecast in September.
“This would be well above our estimate of China’s long-term growth potential of around 5.5%, but is quite achievable from such a low base in 2020,” Fitch analysts Brian Coulton and Pawel Borowski wrote in the report released Thursday.
The analysts pointed out that in the last few months, data indicate a significant recovery in Chinese consumption, particularly in the catering industry and other activities that involve social gatherings. The global economic environment will likely also improve in the second half of next year as more people are vaccinated, the report said.