UBS lowers forecast for China 2025 GDP growth to 3.4% on tariff hikes

UBS has downgraded its China GDP growth forecast to 3.4% for 2025, on the assumption that tariff hikes between it and the United States will remain in place and that Beijing will roll out additional stimulus, it said in a report on Tuesday.

The Swiss investment bank’s previous forecast for China’s growth this year was 4%. It maintained its 2026 forecast at 3%.

The bank also expected China’s exports to the U.S. to fall by two-thirds in the coming quarters and overall Chinese exports to fall by 10% in U.S. dollar terms in 2025, by also factoring in slower American and global economic growth.

“We think some of China’s other trading partners may also raise tariffs on Chinese goods in the coming months, but likely only on specific products and not in similar magnitudes as the U.S. tariffs,” it said.

UBS said it was extremely difficult to predict how the tariffs between the U.S. and China could evolve, but said it is still possible that the world’s two largest economies could engage in discussions and negotiations, and for both to “roll off some of the recent tariff hikes in the next month or two”.