Goldman Sachs and Citigroup cut their annual growth forecasts for China's economy to 4.7 percent this year after industrial production slowed to a five-month low in August, drawing renewed attention to the slow recovery and the need for more stimulus.
the Reuters Regarding this news, he noted that the new forecast is lower than the Chinese government’s forecast for growth of 5 percent. Goldman Sachs had previously forecast growth of 4.9 percent and Citigroup 4.8 percent for the full year in the world’s second-largest economy.
In August, China’s industrial output expanded 4.5% year-on-year after 5.1% in July, while retail sales, a key gauge of consumption, rose 2.1%; the latter was below July’s 2.7% growth and analysts’ expectations of 2.5%. Moreover, retail sales have been weak throughout the year.
They are not achieving the government's goal.
We believe there is a growing risk that China will fail to meet its 5% annual GDP growth target, and that further demand-side easing measures are increasingly urgent.
Goldman Sachs wrote in its note over the weekend.
However, the US investment bank and financial services provider did not change its growth forecast for next year, keeping it unchanged at 4.3 percent.
However, Citigroup also expects lower growth by 2025, just 4.2 percent instead of the latest forecast of 4.5 percent. “We believe fiscal policy needs to move to get out of the austerity trap and help growth with timely support,” Citigroup economists said.
There is hope for the Chinese economy
Hui Shan, chief China economist at Goldman Sachs A Business from the inside According to his report, he believed that a week ago.
After a long recession, the world's second-largest economy may be on the verge of a turnaround.
This is thanks to financial easing, strong export dynamics, and mitigation of weather-related risks.
