Goldman Sachs improved forecasts for China’s economic growth

Goldman Sachs has improved its forecasts for China’s economic growth in 2024 and 2025, Bloomberg reports.

The forecast has been improved on the back of Beijing’s unveiling of a number of stimulus measures, including recent plans to increase government spending.

Goldman Sachs expects China’s GDP to grow by 4.9% this year, up from 4.7% previously forecast. According to a new research note, the investment bank also raised its forecast for Chinese economic growth in 2025 to 4.7% (previously 4.3%).

“China’s latest round of stimulus clearly indicates that policymakers have moved beyond cyclical policy management and are focusing on the economy,” Goldman economists wrote.

On October 12, China promised to “significantly increase” debt issuance to revive its economy, Reuters writes, but left investors guessing about the total amount of the stimulus package.

Finance Minister Lan Foan said: Beijing will help local governments solve debt problems, support the real estate market and replenish the capital of state-owned banks, among other measures.

Investors are calling on China to take these steps as the country’s economy is losing momentum. China is trying to overcome deflationary pressures and boost consumer confidence amid a sharp decline in the real estate market.

China’s economic data in recent months has not met expectations. Economists and investors are concerned that meeting the growth target of about 5% this year is in jeopardy. In addition, a long-term structural slowdown in the economy may occur.

Data for September, which will be published shortly, is expected to show further weakness. However, Chinese officials have expressed “full confidence” that the 2024 target will be met.

As GMK Center reported earlier, the World Bank estimates that China’s GDP growth rate will decline to 4.3% next year, compared to the projected 4.8% in 2024.