DBS Group Research economists Byron Lam and Daisy Sharma reported that China’s real Gross Domestic Product (GDP) grew by 5.0% year-on-year in the first quarter of 2026, up from 4.5% in the fourth quarter of 2025, driven primarily by strong external demand. However, they noted that domestic economic momentum remained uneven, with subdued consumption, investment, and credit growth, largely due to persistent stress in the property sector and ongoing efforts to reduce industrial overcapacity [1].
According to DBS’s GDP Nowcast model, growth is expected to slow to 4.5% in the second quarter of 2026. The anticipated moderation is attributed to weakening industrial activity, exports, and retail sales, while credit and fixed asset investment are also projected to remain subdued [1].
Looking ahead, DBS forecasts that China’s GDP growth will further moderate to 4.5% for the full year 2026. The economists highlighted several downside risks to this outlook, including geopolitical tensions in the Middle East, higher energy prices, and potential supply chain disruptions [1].
No specific market reactions or analyst opinions beyond the DBS forecast were mentioned in the article [1].
CONCLUSION
DBS Group Research expects China’s GDP growth to moderate in the coming quarters, citing weaker industrial activity and external risks. The outlook points to a slowdown from the strong start in 1Q 2026, with persistent domestic challenges and global uncertainties weighing on future growth prospects.