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Fitch Ratings Raises China's 2023 GDP Forecast

Fitch Ratings has raised its 2023 GDP forecast for China from 5.2% to 5.6%, citing a swifter-than-expected reopening rebound in the first quarter.

The ratings agency said that China's economy is expected to grow by 5.5% in 2022, before accelerating to 5.6% in 2023.

Fitch said that the Chinese government's stimulus measures are starting to take effect, and that the country's export sector is also benefiting from the global economic recovery.

However, Fitch warned that there are still risks to the outlook, including the ongoing COVID-19 pandemic and the war in Ukraine.

"The Chinese economy has surprised on the upside in the first quarter," said Brian Zhang, a senior director at Fitch Ratings. "The recovery has been driven by a combination of factors, including the government's stimulus measures, the reopening of the economy, and the strong performance of the export sector."

Zhang said that Fitch expects China's GDP growth to continue to accelerate in the second quarter, but that the pace of growth is likely to moderate in the second half of the year.

"The risks to the outlook include the ongoing COVID-19 pandemic, the war in Ukraine, and the potential for a sharp rise in interest rates in the United States," said Zhang.

Despite these risks, Fitch said that it is still confident in China's long-term growth prospects.

"China remains one of the world's fastest-growing economies," said Zhang. "We believe that the government's reforms will help to sustain growth in the long term."

The decision by Fitch Ratings to raise its GDP forecast for China is a positive sign for the Chinese economy. It suggests that the economy is on track to recover from the COVID-19 pandemic and that the government's stimulus measures are having the desired effect. However, there are still risks to the outlook, and it remains to be seen how the economy will perform in the second half of the year.

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