UOB Group’s economist, Ho Woei Chen, observes that China’s March CPI and PPI were affected by subdued consumer goods and food prices, declining international oil prices, and export sector pricing pressures. Due to stronger-than-anticipated downward price pressures and increased economic challenges stemming from the ongoing trade war, the 2025 CPI and PPI forecasts have been revised downward to 0% (from 0.9%) and -2.0% (from -1.2%), respectively. Heightened economic risks following the recent tariff increases between the US and China pose a threat of deeper trade decoupling. This could significantly impact China’s exports and investment, potentially reducing the annual GDP growth rate by as much as 2 percentage points if elevated tariffs persist. A comprehensive assessment of the growth impact will be conducted following further developments. China is scheduled to release key economic indicators for March and Q1 2025 GDP on April 16th. Q1 2025 GDP growth is projected to be approximately 5.4% year-on-year (Q4 2024: 5.4%), and the baseline growth forecast of 4.7% will be re-evaluated to incorporate the effects of the additional tariffs.
