Goldman Sachs Lowers China’s Growth Forecast as Property Slowdown Takes Toll

Goldman Sachs analysts have revised down their forecasts for China’s economic growth, pointing to persistently weak confidence and the challenges facing the property market as significant obstacles.

According to a note published on Sunday, the US investment bank has lowered its projection for the country’s real gross domestic product (GDP) growth for the full year. The new forecast now stands at 5.4%, down from the previous estimate of 6%. Additionally, Goldman Sachs adjusted its 2024 growth forecast from 4.6% to 4.5%.

This downward revision aligns with similar moves made by other global financial institutions. However, despite the adjustment, Goldman Sachs remains relatively optimistic compared to its peers, as data indicates a slowdown in China’s post-pandemic recovery. The bank has also recently lowered its outlook for the Chinese currency.

The analysts, led by economist Hui Shan, highlighted the property market downturn and its cascading effects as the primary reason for the growth headwinds. They noted that the boost from the reopening of the economy has faded quickly in China.

“We judge that growth headwinds are likely persistent while policymakers are constrained by economic and political considerations in delivering meaningful stimulus,” stated the analysts.

China’s government has set a modest GDP growth target of approximately 5% for this year, having fallen significantly short of its 2022 goal. State media reported that the cabinet met on Friday to discuss measures aimed at stimulating growth, reflecting the country’s recognition of the need for strategic interventions.

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