By Kevin Yao

BEIJING (Reuters) – China’s economy is likely to expand 4.8% in 2024, undershooting the government’s target, and growth could cool further to 4.5% in 2025, a Reuters poll showed, maintaining the pressure on policymakers as they consider more stimulus measures.

Gross domestic product is forecast to have risen 4.5% in the third quarter from a year earlier, slowing from 4.7% in the second quarter and hitting the weakest since the first quarter of 2023, according to the poll, which was conducted between Sept. 27 and Oct. 15.

Authorities have sharply ramped up policy stimulus since late September in a bid to revive the flagging economy and ensure growth will reach the government’s target of around 5% this year.

“The main pressure is from the consumption side, which is linked to deflationary pressures,” said Xing Zhaopeng, ANZ’s senior China strategist.

Xing expects economic activity to improve in the fourth quarter as a raft of stimulus measures kick in, but still maintains his 2024 growth forecast at 4.9%.

China, which has rarely failed to reach its growth target, last missed it in 2022 when the pandemic knocked growth to 3%, sharply lower than the goal of around 5.5%.

The government is due to release third-quarter GDP data and September retail sales, industrial production and investment data at 0200 GMT on Oct. 18.

The latest poll showed a broadly pessimistic outlook when compared to the previous poll in July, when economists predicted 2024 growth of 5.0%.

Out of 75 common contributors, who participated in both the July and October polls, a majority of economists, or 57%, have downgraded their growth forecasts for this year and 32% have kept it unchanged.

All the polling was conducted after the latest monetary measures, but this has not moved the needle on GDP forecasts at all for the two years Reuters poll on, underlining the depth of pessimism around the growth outlook amid a prolong property crisis.

Analysts and investors expect a meeting of China’s parliament later this month will unveil more specific stimulus plan.

Growth in the world’s second-largest economy is forecast to slow further to 4.5% in 2025, according to the poll, unchanged from the poll in July.

Last week, China’s finance minister pledged to “significantly increase” debt to revive growth, but left investors guessing on the overall size of the stimulus package.

China may raise an additional 6 trillion yuan ($850 billion) from special treasury bonds over three years to help bolster a sagging economy through expanded fiscal stimulus, Caixin Global reported, citing multiple sources with knowledge of the matter.

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Reuters reported last month that China plans to issue special sovereign bonds worth about 2 trillion yuan this year as part of fresh fiscal stimulus.

The central bank in late September announced the most aggressive monetary support measures since the COVID-19 pandemic, including interest rate cuts, a 1 trillion yuan liquidity injection and other steps to support the property and stock markets.

Analysts polled by Reuters expect the central bank to cut the one-year loan prime rate, the benchmark lending rate, by 20 basis points in the fourth quarter, and reduce banks’ reserve requirement ratio (RRR) by 25 basis points.

The PBOC is likely to cut the seven-day reverse repo rate – its main policy rate – by 20 basis points in the first quarter of 2025. The bank cut the rate by 20 bps on September 27.

China’s consumer inflation unexpectedly eased in September, while producer price deflation deepened, heightening pressures on Beijing to take steps to spur demand as exports lose steam.

Analysts polled by Reuters estimate a 0.5% rise in China’s consumer prices for this year, well below the government’s target of around 3%, before picking up 1.4% in 2025.

(For other stories from the Reuters global long-term economic outlook polls package:)

(Polling by Susobhan Sarkar and Anant Chandak in Bengaluru and Jing Wang in Shanghai; Reporting by Kevin Yao; Editing by Shri Navaratnam)