(Yicai Global) April 6 -- Economists forecast that China's GDP will grow at a rate of 6.79 percent year on year in the first quarter of 2017, higher than the 6.70 percent in the same period last year and slightly lower than the 6.8 percent in the fourth quarter last year, shows the result of a survey on 16 chief economists from major domestic financial institutions conducted by Yicai Research Institute.
Economists' forecast for the average annual GDP growth in 2017 also rose from 6.48 percent at the end of last year to 6.54 percent this month. Most of the respondents believe that the economic growth target of 6.5 percent set by Chinese government for the year 2017 will be achieved.
The most optimistic GDP growth expectation of 7 percent were expressed by Huang Jianhui from China Minsheng Bank and Li Xunlei from Qilu Securities (Shanghai) Asset Management Co., and the most pessimistic expectation, 6.4 percent, came from Xu Sitao of Deloitte China.
The economy has stabilized over the past few quarters, giving more confidence to economists. The Yicai Chief Economist Confidence Index reached 50.95 in March, the eighth consecutive month above 50 points.
But the results also indicate that the economic growth may decline in the next few quarters. Within such economic context, a proactive fiscal policy will continue, while the monetary policy will remain prudent and neutral due to various factors. Economists expect new loans and social financing scale to pick up in March from a month earlier, but M2 growth may decline.
As for forecasting specific indicators, consumption will see a steady rise. Considering the base, the year-on-year CPI growth will pick up, while the PPI growth will decline. Fixed asset investment growth will see a drop; trade surplus will turn positive; exports will grow and turn positive, and imports will fall from the previous month.
Although the exchange rate of the yuan against the dollar rallied in the first quarter, the economists surveyed still expect that the yuan to depreciate against the dollar within the year, but the rate will be lower than last year.
Economists predict that the yuan would depreciate against the dollar to 6.91 by the end of April (the central parity rate of the yuan against the dollar on March 31 was 6.899) and raise the expected central parity rate to 7.10 from 7.12 at the end of last month.
The 16 chief economists also commented on whether Chinese A shares would be included in MSCI this year. Seven of them predicted yes, four opted for no, and the other five said it was difficult to judge.
[Table 1 Chief Economist Survey by Yicai Research Institute, March 2017]