SINGAPORE — Goldman Sachs analysts have downgraded China’s economic growth forecast, citing continued weakness in confidence and the cloud over the housing market as stronger-than-expected headwinds.
The U.S. investment bank lowered its full-year real gross domestic product growth forecast for the world’s second-largest economy from 6% to 5.4%, according to a note released late Sunday. It also lowered its growth forecast for 2024 from 4.6% to 4.5%.
The drop follows similar moves from its global peers, but still leaves Goldman among the most optimistic as data shows China’s post-pandemic recovery is faltering. The bank had also recently, like others, reduced its outlook for the Chinese currency.
BofA Global Research cuts China growth forecast for 2023 after weak May data
“No reopening stimulus has faded as quickly as in China,” the analysts, led by economist Hui Shan, said, citing the housing slowdown and its flow effects as the main reason.
“We believe headwinds to growth are likely to persist as policymakers are compelled by economic and political considerations to provide meaningful stimulus.”
The Chinese government has set a modest GDP growth target of around 5% for this year after missing its 2022 target and state media reported that the cabinet met on Friday to discuss measures to to stimulate growth.
China confident of hitting 2023 economic growth target: state planner
It has cut several key interest rates slightly in recent days, which would pave the way for a cut in prime benchmark lending rates on Tuesday.
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