Global Times | OECD upgrades China GDP forecast to 5% for 2025
The Organization for Economic Cooperation and Development (OECD) on Tuesday upgraded China's GDP forecast for 2025 to 5 percent, up by 0.1 percentage point compared with its previous projection in September. The upgrade by the OECD and other foreign institutions conveyed positive expectations for the world's second-largest economy amid robust policy support and strong resilience, experts said.
The OECD highlighted China's annual growth of 5.2 percent year-on-year in the first three quarters of 2025. Consumption has been supported by the expansion of a trade-in program, including cars and home electronics, according to the latest OECD Economic Outlook posted on its website.
China's fiscal policy has been expansionary in 2025 with the introduction of a number of measures to support incomes and boost consumption, in addition to the trade-in program for cars and household appliances, it said.
In addition to OECD, multiple foreign institutions, including Standard Chartered and Goldman Sachs, have raised their projections for China's economic growth rates and expressed optimism about Chinese assets.
Standard Chartered raised its forecast for China's 2026 GDP growth to 4.6 percent from 4.3 percent, supported by the country's gains in total factor productivity (TFP) and resilient exports, according to a note the bank sent to the Global Times on Tuesday.
"We expect exports to stay resilient and policy to continue to support domestic demand, especially consumption," analysts wrote in the note. China's TFP gains should continue to fuel growth, aided by rapid artificial intelligence (AI) adoption, according to the note.
Meanwhile, Goldman Sachs has upgraded its forecast for China's 2025 real GDP growth from 4.9 percent to 5.0 percent, with even bigger increases in the forecasts for the next two years, on the view that stronger exports will drive overall economic expansion. Goldman Sachs Research increased its real GDP forecast for 2026 from 4.3 percent to 4.8 percent, and for 2027 from 4.0 percent to 4.7 percent.
Thanks to the increase in China's nominal GDP growth rate and accelerated growth in enterprises' revenue, along with a profit margin recovery driven by support policies and the anti-involution campaign, the earnings growth rate of the entire A-share market in 2026 is expected to rise further from 6 percent to 8 percent, Meng Lei, China equity strategist at UBS Securities, said in a note sent to the Global Times.
"Large-scale foreign financial institutions have in-depth understanding of China's institutional advantages, massive market scale as well as solid economic fundamentals after years of analysis. Their overall positive expectations underscore their confidence in the sustained high-quality development of the world's second-largest economy," Hu Qimu, a deputy secretary-general of Forum 50 for Digital-Real Economies Integration, told the Global Times on Tuesday.
Fresh macro-data also showed that China's economy maintains its positive growth trajectory. The purchasing managers' index for China's manufacturing sector stood at 49.2 in November, up 0.2 from a month earlier, indicating improvement in manufacturing activity, according to data released by the National Bureau of Statistics on Sunday.
At the fourth plenary session of the 20th Central Committee of the Communist Party of China (CPC) in October, the CPC Central Committee established guiding principles for economic and social development during the 15th Five-Year Plan (2026-30) period, including pursuing high-quality development.
Given such a signal, China will surely fulfill the economic and social development targets for high-quality development, Hu said.
This year marks the final lap for China's implementation of its 14th Five-Year Plan (2021-25). During the period, the country contributed an approximate annual average of 30 percent of global growth, becoming a crucial stabilizer and driving force for the world economy. The momentum is expected to be sustained in the coming five years, analysts said.
Next year marks the start of the 15th Five-Year Plan period, with the GDP expected to maintain a stable growth rate, so as to lay the foundation for China's per capita GDP in 2035 to effectively double its 2020 level at constant prices, Wan Zhe, an economist and professor at the Belt and Road School of Beijing Normal University, told the Global Times.
Wan said that one of China's core strategic tasks next year is building a modernized industrial system and reinforcing the foundations of the real economy. "The contribution of consumption to the country's economic growth is expected to further increase," she said, noting that both industrial investment and research and development investment will also likely increase in 2026 amid the nation's innovation-driven development.