(Yicai Global) Oct. 10 -- The annual growth of China’s gross domestic product is expected to rebound to 3.7 percent in the third quarter from 0.4 percent in the second quarter despite the Covid-19 outbreaks in the country, as the policies to stabilize the economy are strengthening, according to chief economists at major Chinese financial institutions polled by Yicai Global.

China’s GDP growth this year will average 3.5 percent, the economists forecast, pointing out that it will be difficult for the country to achieve the target of 5.5 percent.

The Yicai Chief Economists Confidence Index rose to 50.3 this month, up from 50.1 in September and the highest since July, according to a survey of 16 leading economists in China. A reading above 50 indicates positive sentiment.

The consumer price index and value-added industrial output likely jumped 2.8 percent and 4.7 percent, respectively, in September from a year earlier, both higher than the readings the National Bureau of Statistics calculated for the previous month, the results of the survey showed.

The producer price index and the consumption growth rate are expected to have risen 1 percent and 5.8 percent last month from the same period last year, lower than the official figures for August, according to the economists. 

Fixed asset investment likely climbed 5.8 percent in September from a year earlier and the trade surplus was USD79.7 billion, both unchanged from last month.

The economists’ prediction for September’s financial data was not in line with the official figures for the previous month. New yuan loans and social financing are expected to have risen to CNY1.35 trillion (USD190 billion) and CNY2.7 trillion, respectively. M2 broad money is thought to have fallen to 12.1 percent.

The Chinese yuan will likely continue to depreciate against the US dollar in the upcoming month, trading at 7.12 by the end of September from 7.0998, the survey participants said. Their expectations for the end of the year were also lowered to 7.1 from 6.84.

The strengthening of the US dollar index and the divergence of monetary policies between China and the US are the main reasons for the sharp depreciation of the yuan against the US dollar, which will lead to capital outflows and pressure on China’s capital markets in the short term, yet having a limited impact on the country’s macroeconomy in the long run.

Editor: Futura Costaglione