Fitch Ratings has lowered its growth forecast for China to under 4 per cent for both 2025 and 2026, citing escalating tariffs and deflationary pressures that are expected to stall the country's recent momentum, it said in a special update to its quarterly Global Economic Outlook on Wednesday. Although China's economy surprised on the upside in recent quarters, with net trade contributing significantly to growth, Fitch now anticipates a sharp deceleration. Exporters are struggling to find alternative markets amid soaring US tariffs—now exceeding 100 per cent on some Chinese goods. "China's economy has grown faster than expected over the past year, but net trade has accounted for a third of GDP growth. This will slow sharply as exporters struggle to redirect sales in the near term." Fitch said. The ongoing housing slump and persistent deflation are weighing heavily on domestic demand. However, Fitch expects a wave of fiscal and monetary stimulus from Beijing in response, as policymakers work to cushion the blow of diminishing external demand. Attribution: Amwal Al Ghad English
