Goldman Sachs cuts China growth forecast as property slowdown bites

SINGAPORE  – Goldman Sachs analysts have cut forecasts for China’s economic growth, citing persistently weak confidence and the cloud over the property 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 biggest economy from 6 percent to 5.4 percent, according to a note published late on Sunday. It also lowered its 2024 growth forecast from 4.6 percent to 4.5 percent.

The cut follows similar moves by global peers, though still leaves Goldman among the most optimistic, as data shows China’s post-pandemic recovery faltering. The bank had also lately, like others, cut its outlook for China’s currency.

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“No reopening boosts have faded as quickly as in China,” said the analysts, headed by economist Hui Shan, citing the property downturn and its flow-on effects as the main reason.

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

China’s government has set a modest GDP growth target of about 5 percent for this year after badly missing its 2022 goal and state media reported the cabinet met on Friday to discuss measures to spur growth.

China confident of hitting 2023 economic growth target -state planner

It has lowered several key interest rates slightly in recent days, seen as paving the way for a cut in benchmark loan prime rates on Tuesday.