DBS Group Research economists Byron Lam and Daisy Sharma have released a China GDP Nowcast, estimating that real GDP growth likely improved to 4.7% in the first quarter of 2026, up from 4.5% in the fourth quarter of 2025 [1]. The Nowcast is based on available economic data and forecasts for the current quarter, with monthly data releases for January and February indicating that China began 2026 on a solid footing [1]. According to DBS, growth in Q1 is being driven by robust industrial activity and strong external demand for Chinese goods, while consumption remains broadly stable. However, investment and credit are described as weak [1].
Looking ahead, DBS expects China's annual GDP growth to moderate to 4.5% in 2026, compared to 5.0% in 2025 [1]. The report also notes that geopolitical tensions in the Middle East and higher oil prices, specifically Brent crude averaging USD100 for the remainder of the year, pose mild downside risks to China's growth. These risks could potentially lead to a 0.5 percentage point fall in GDP [1].
No specific market reactions or analyst opinions beyond the DBS forecast are mentioned in the article. The focus remains on the improved Q1 growth estimate and the potential headwinds from external factors such as oil prices and geopolitical tensions [1].
CONCLUSION
DBS Group Research's Nowcast suggests China’s GDP growth improved in Q1 2026, supported by strong industrial activity and external demand. However, annual growth is expected to moderate, with risks from higher oil prices and geopolitical tensions potentially impacting the outlook. The market takeaway is cautiously optimistic, with attention to external risks.