On July 1st 2025, BOC Research Institute released the Economic and Financial Outlook for 2025Q3 (hereinafter referred to as the “Report”) in Beijing. The Report reviews the economic and financial operations both globally and in China as well as the operations of the global banking industry in 2025H1. It also provides an outlook on the economic and financial situations and the trends of the global banking industry in 2025H2.
In terms of global economic and financial situations, the Report notes in 2025Q2, the momentum of global economic growth further weakened. While supply was relatively stable, demand continued to be sluggish. Growth in private consumption remained weak, investment activities expanded slightly, and global inflation declined at a slower pace. Fluctuations in International trade intensified. Major economies tended to ease their fiscal policies, but diverged in monetary policy stances. Global FDI rebounded to some extent, while risk aversion was on the rise among securities investors. The geopolitical changes in the Middle East, sovereign debt risks fluctuations in the economic and trade areas disturbed market trends. In 2025Q3, global economy will see a rising downward risk, exposed to more challenges posed by tariff-related policy adjustments. Weakening demand may mitigate global inflationary pressure to a certain extent. Progress of negotiations will become the key to the trend of international trade. The risk associated with the US dollar liquidity shock will grow, the US dollar index will tend to weaken, and the US treasury bond yields may further increase.
In terms of China’s economic and financial situations, the Report notes in 2025H1, amid the drastic changes in the external environment, China stepped up the implementation of more proactive and effective counter-cyclical adjustment policies. As a result, domestic demand was generally stable, exports performed exceeded expectation, industrial production grew fast, and the economy remained generally stable. However, due to external shocks and renewed weakening of the real estate market, economic activity moderated to some extent in 2025Q2. In 2025H2, China’s economy will still face multiple uncertainties and destabilizing factors, particularly the highly uncertain US tariff policies that will weigh on export growth. It’s expected that the economic growth in the second of the year will be lower than that in the first half of the year, with GDP growing by around 5% in 2025Q3, and around 5% in the full year.
In terms of global banking situations, the Report notes in 2025Q3, due to the relatively weak global economic recovery, banking operations will under pressure, with scale expansion slowing down. However, emerging industries will show a strong momentum of growth, providing new underpinning to the growth of banking profitability. Asset quality will show some divergence, while capital replenishment will be stable. In 2025Q3, amid the recovery and growth of China’s economy, the banking industry will focus on technology finance, work to forge new growth drivers for serving the real economy, steadily expand in scale, strengthen profitability, maintain sound asset quality, and sustain a healthy level of capital adequacy.
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