BOC: Economic and Financial Outlook Q3’21
Bank of China Research Institute released the “Economic and Financial Outlook Report for the Third Quarter of 2021” in Beijing on July 5, 2021.
The report reviewed global economics, global financial operations, and the global banking industry in the first half of 2021. It concluded with outlooks on the economic and financial situation in the second half of 2021, forecasting the development trend of the global banking industry.
Regarding China’s economic and financial situation, in the first half of 2021, China’s economy continues to maintain a stable recovery trend, but with the gradual degrading of the base in effect, the major economic growth rate will return to normal from the current high level, and the GDP growth in the second quarter is expected to be about 7.9%.
In the second half of the year, the uncertainty brought about by changes in the external environment is the biggest variable affecting China’s economy.Unsynchronized global COVID-19 prevention and control, uneven economic recovery, intensified political and economic struggles, and expected rising of the Fed’s monetary policy have all increased the uncertainty of the external environment.
Consumption and investment growth continues to improve, and domestic demand will further increase its support role, but the improvement of domestic demand may not be able to compensate for the slowness of external demand growth. The GDP growth in Q3 is expected to be around 6.3%, and the annual GDP growth is around 8.8%.
Regarding the development of the global banking industry, in the first half of 2021, the global economy will resume growth, the banking industry will grow steadily, and operations will be improving steadily.
The improvement in the profitability of the Chinese banking industry is evident and continues to support the economy with stable asset qualities. With the steady withdrawal of the Covid-19 prevention and control policies in Q3’21, the banking industry confronts adjustments.
As far as the Chinese banking industry is concerned, the stable and rapid growth of the profitability trend is maintained, the overall asset quality has remained stable, and the risk compensation capability is strong.
Currently, global concerns concentrate on the importance of carbon neutrality. China pushes out the “30•60” climate strategic goal. The banking industry is facing challenges, which may reshape the industry with a new competitive landscape.
