Goldman Sachs slashes China’s ’24 economic growth

Global investment banks Goldman Sachs and Citigroup have revised their full-year projections for China’s economic growth downward to 4.7 per cent.

The decision follows the release of August’s industrial output data, which showed a significant slowdown to a five-month low.

The weak economic activity in August has intensified concerns about China’s sluggish recovery and prompted calls for more robust stimulus measures to boost demand. As a result, several global brokerages have reduced their 2024 growth forecasts below the government’s target of around five per cent.

Goldman Sachs, which previously anticipated full-year growth of 4.9 per cent, has now adjusted its projection to 4.7 per cent. Citigroup, too, has lowered its forecast from 4.8 per cent to 4.7 per cent.

August’s industrial output data revealed a 4.5 per cent year-on-year expansion, a decline from the 5.1 per cent growth recorded in July. This represents the slowest pace since March.

Additionally, retail sales, a crucial indicator of consumer spending, rose by 2.1 per cent in August, down from 2.7 per cent in July.

In response to the weakening economic outlook, Goldman Sachs has emphasised the need for more aggressive demand-side easing measures. The investment bank has maintained its 2025 GDP growth forecast at 4.3 per cent.

Citigroup, however, has taken a more cautious stance, trimming its 2025 year-end forecast for China’s GDP growth to 4.2 per cent from 4.5 per cent.

The bank has highlighted the lack of significant catalysts for domestic demand and called for increased fiscal stimulus to address the economic slowdown.

Attribution: Reuters

Subediting: M. S. Salama