Multinational investment bank UBS Group AG has projected that the gross domestic product of China will grow by 4.6 percent in 2024, down from an earlier estimate of 4.9 percent.

The Switzerland-based firm also lowered the GDP expansion of China to 4 percent in 2025, from a previous projection of 4.6 percent. The Swiss-based financial services company added that the ongoing crisis faced by the Asian giant has dragged down everything which includes the country's job market, consumption, and household wealth in the past two years.  

Weaker property activities to continue in China

UBS attributed this downgrade to a deeper-than-expected property market slump that's yet to see a bottom.

"We expect weaker property activities to have a bigger drag on the overall economy than earlier expected, including through household consumption," said economists at UBS.

According to UBS, the measures taken by China to reduce mortgage rates and low down-payment requirements had limited impacts on the Chinese economy. "China's property demand and supply fundamentals have changed in recent years, market confidence is low amid weak household income growth, and inventory levels are high while destocking implementation has been slow," added UBS economists. 

UBS downgrades China's property sector

Meanwhile, UBS also downgraded the outlook of China's property sector, and noted that a revival could happen only by mid-2026. The report also noted that home prices in China were stable on a month-on-month basis in July, but it declined at a faster rate compared to the same month of the previous year.

Meanwhile, the Chinese government, on Tuesday, said that the profits of companies operating in the industrial sector of China edged up by 3.6 percent in the first seven months of this year, compared to the same period in 2023.

The report by China's National Bureau of Statistics noted that the industrial sector in the country is rebounding quickly, driven by massive market demand.