JPMorgan & Citi Predict China's Growth Outlook for 2025: US Dollar Buckles?

Following a stronger-than-expected first-quarter gross domestic product growth of 4.5%, Analysts at JPMorgan and Citi raised their full-year forecasts for China's economy. This positive revision comes as the U.S. dollar faces increasing pressure amidst global economic shifts.

Earlier this year, China’s government set a target of “about 5 percent” GDP growth for 2025. J.P.Morgan and Citigroup upgraded China's 2025 full-year gross domestic product growth forecast on Tuesday, citing that the country's decision to lift stringent COVID-19 restrictions last year has fueled economic recovery. Citigroup has lifted its forecast to 5 percent from 4.7 percent, saying retail sales are showing strong signs of recovery. After China’s GDP (gross domestic product) beat Q1 2025 estimates, financial giants, JPMorgan and Citi, have raised their expectations.

In this blog, we discuss the revised GDP forecast for 2025 and China’s policy responses to what some are calling trade war 2.0. We'll also assess the potential impacts of the December Politburo meeting and Central Economic Work Conference on China's economic trajectory. What stimulus plans were announced, and how do they factor into this improved outlook?

While some annual forecasts released in Beijing still suggest a slower pace for China's economy in 2025 compared to the revised projections, the general sentiment is optimistic. This massive improvement in the living standards of more than a billion people is important, as China will likely reach a milestone in its development in 2025: achieving USD 10,000 GDP per capita.

This note assesses the potential paths of both developments and how their intersection could impact China’s outlook for 2025, including the effects on the U.S. dollar. Will the dollar continue to buckle under the pressure of a resurgent Chinese economy? Stay tuned as we delve deeper into the JPMorgan and Citi predictions and their implications.