1Q GDP Nowcasting: China, India, Indonesia, Singapore

High interest rates, waning external demand, and structural uncertainties over great power rivalry will mark for a soft start to 2023.
Group Research, Taimur Baig, Daisy Sharma20 Jan 2023
  • Our China Nowcast model suggests 2.5% growth in 1Q23. But forecast risk is clearly to the upside
  • India is heading to sub-5% growth in 1Q23, but growth take-off should be around the corner
  • Indonesia is likely to coast at around 5% growth through 1Q23
  • As global trade slows, so does Singapore. Low-1% growth in the making
Photo credit: Adobe Stock

For detailed note with charts, please download the PDF


Even though the beginning of the year has been marked by rising optimism around China’s re-opening, the drag from last year’s struggles will continue to overshadow the near-term GDP outturn. Updating our China real GDP model with the 4Q22 data and extending our Nowcast through the first three months of the year, we estimate no more than 2.5% growth in 1Q23. 

What’s driving such a lacklustre outcome? First, base effect is in play, as the economy grew by 4.8% during the same period last year. With the level of economic activity weakening through 2022, a rather substantial quarter-on-quarter jump would be necessary for the year-on-year growth to be in the 4% range, as per our calculations.

Sharply weakening external demand is another driver of our sub-3%yoy real GDP Nowcast estimated. Exports were down nearly 10%yoy in December, with global PMIs showing no signs of a turnaround in demand in the near term.

Additionally, the investment environment, battered by regulatory crackdown and property market distress, has been poor. The worst in regulation and property market tightness may be over, but it will take a lot more for investment sentiment to revive meaningfully, in our view.  

It is however conceivable that growth would surprise on the upside as re-opening takes flight after the LNY holidays. Travel could surge, along with the demand for a broader range of services. Financial markets, which have rallied lately, could bring in some animal spirits as the wealth effect kicks in. The government’s pro-growth push could begin to produce some results as well. 


These days, India is the darling of the global investor community. Seen as a major potential winner of the China-plus-one strategy for global manufacturing, India is poised to received large investment inflows into its economy and markets. Financial markets are buoyant, credit and consumption demand is strong, and despite exports growth coming to a standstill, purchasing manager’s surveys indicate strong confidence in the near term outlook.

Still, our model is indicating that India is heading into sub-5% growth trajectory. This should not be a major source of surprise, as high interest rates, slumping exports, and fiscal consolidation are subtracting from real GDP growth.

Data from the past two decades show that while India is largely a domestic demand driven economy, it is adversely affected by global events nonetheless. Beyond the energy inflation shock of last year or ongoing liquidity tightening worldwide, India’s economy is affected by external demand, sentiment of global investors, and regional trade dynamics. These are not flashing bright green right now.

We don’t think the soft patch in the making will last long, and like China, find the outlook characterised by upside risks, especially given the easing of energy prices.  


The economy is coasting on trend growth path. Aided by the favourable commodity sector outcome of the past couple of years, a resumption in tourism-related inflows, and a proactive public sector spending agenda, growth continues to hover around 5%. Our Nowcasting model finds only a marginal weakness in the growth momentum ahead.

During 1Q23, strong private consumption and public spending are likely to offset emerging softness in commodities, keeping growth to over 4.5%. Weakening demand for non-commodities exports will act as another dampener for GDP. Higher than targeted inflation will constrain Bank Indonesia from supporting the economy.

Still, Indonesia is being seen in favourable light by global investor base. An easily serviceable public debt stock, growing interest from investors in mining, refining, and manufacturing, and a largely stable governance-related environment ought to help solidify the foundation of the economy.


An open, trade-oriented economy like Singapore is bound to be hurt by the ongoing downturn in global demand. Exporters have been feeling the pressure for a while, which has translated into a downtrend in industrial production. Credit growth has slowed owing to rising rates, although resurging tourism and public events have been acting as a powerful counter to the ongoing malaise in Singapore’s goods exports sector.

Our Nowcast model sees growth easing to 1.3%yoy in 1Q23. We expect some softening in the property sector, and we don’t see a rebound in exports anytime soon. Public sector support, external demand for Singapore properties, and a generally constructive domestic investment environment ought to prevent the economy from falling into a recession this year.

To read the full report, click here to Download the PDF


Taimur Baig, Ph.D.

Chief Economist - Global

Daisy Sharma

Data Analytics

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