Goldman Sachs joins other Wall Street banks in reducing China’s growth forecast

Goldman Sachs has downgraded its growth forecast for China, citing the country’s sluggish economic performance and mounting pressure on its property sector following the coronavirus reopening.

The investment bank has revised its full-year gross domestic product (GDP) forecast for 2023 from 6% to 5.4%, anticipating continued turbulence in the Chinese economy. Despite additional stimulus measures, Goldman Sachs highlights weakened sentiment as a major obstacle.

In a research note, Goldman Sachs’ economists, led by Chief China Economist Hui Shan, state, “With continued challenges from the property market, pervasive pessimism among consumers and private entrepreneurs, and only moderate policy easing to partially offset the strong growth headwinds, we mark down our 2023 real GDP forecast.”

This revision aligns with downgrades from UBS, Bank of America, and JPMorgan, all of whom have also lowered their China full-year GDP estimates.

Goldman Sachs’ economists further highlight several macroeconomic issues impacting China’s growth outlook, including demographics, the multi-year property downturn, local government implicit debt problems, and geopolitical tensions.

They also anticipate further weakening of the Chinese yuan against the US dollar due to rate differentials between the People’s Bank of China and the Federal Reserve.

UBS also predicts continued weakness in China’s economy, particularly in the second quarter of the year.

In a note, UBS Investment Bank’s Chief China economist Wang Tao states, “Q2 [second quarter] sequential growth may slow to only 1-2% quarter-on-quarter saar [

Reference

Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.