BNR – Goldman Sachs analysts have reduced their projections for China’s economic growth. They cited continually low trust and the cloud over the property market at record-strong headwinds.
The US investment bank reduced its full-year real GDP growth projection for the globe’s second-largest economy.
According to a note published late Sunday, it reduced it from 6 per cent to 5.4 per cent. Also, it reduced its growth forecast for 2024 from 4.6 per cent to 4.5 per cent.
Similar cuts have been made by global competitors. Goldman remains among the most positive, despite data showing China’s recovery from the pandemic is faltering. The bank, like others, recently reduced its forecast for China’s currency.
“No reopening boosts have faded as quickly as in China,” said the analysts, headed by economist Hui Shan. They pointed out the property decline and its consequences as the primary cause.
Growth Headwinds
“We judge that growth headwinds are likely persistent while policymakers are constrained by economic and political considerations in delivering meaningful stimulus.”
For this year, China’s government has established a modest GDP growth goal of around 5 per cent. This comes after the company fell far short of its 2022 target. According to state media, the cabinet convened on Friday to talk about measures to boost expansion.
Furthermore, it has recently lowered several key interest rates slightly, clearing the path for a reduction in benchmark loan prime rates on Tuesday.
