BEIJING: Barclays cut its forecast for China’s 2023 gross domestic product (GDP) growth to 4.5% from 4.9% because of a faster-than-expected deterioration in the housing market, analysts at the bank said in a note on Tuesday.

China’s economic activity data in July, including retail sales, industrial output and investment, failed to match expectations, fuelling concern over a deeper, longer-lasting slowdown in growth.

Most economists see downside risk to Chinese growth after the release of a batch of July data, which comes on top of a raft of weak indicators from last week - slumping exports and negative consumer prices.

“Our 2023 GDP growth forecast is already at the lower bound of analysts’ forecasts, but we think the weaker-than-expected growth momentum in major economic indicators suggests our forecast of a 4.9% expansion this year is becoming increasingly difficult to reach,” said Barclays.

The July macro data confirm two pain points of growth recovery. The real estate sector remains a big drag on the economic recovery and the consumption recovery stalled amid rising unemployment, said Barclays.

China’s central bank on Tuesday unexpectedly chopped one set of key interest rates, before the July activity data release.

Nomura and Citi were bearish on the world’s second-biggest economy without big fiscal stimulus.

“We believe the Chinese economy is faced with an imminent downward spiral with the worst yet to come, and the rate cut this morning will be of limited help,” said Nomura.

“Only timely delivery of real actions can allow Beijing to meet the around 5% growth target,” said Citi.