Goldman Sachs, like other Wall Street banks, has revised its growth forecast for China due to the country’s weakening economy and lack of confidence. The bank’s analysts now predict China’s GDP growth for 2023 to be 5.4 percent, down from the previous forecast of 6 percent, and expect growth for 2024 to be 4.5 percent, lower than the previous estimate of 4.6 percent.
Goldman Sachs’ chief China economist, Hui Shan, and others have identified several macroeconomic issues that China is currently facing, including challenges in the property market, pessimism among consumers and private entrepreneurs, and limited policy easing. These factors have led to a decrease in China’s full-year GDP forecast, along with other financial institutions such as UBS, Bank of America, Standard Chartered Bank, JPMorgan Chase, and Nomura Holdings.
The bank’s economists also highlight other structural problems affecting China’s growth, such as demographics, a prolonged downturn in the property market, local government debt issues, and geopolitical tensions. Despite the Chinese communist regime’s stimulus measures, which have included interest rate cuts, experts believe that these measures will not be effective in addressing the country’s economic challenges.
Recent data from the Statistics Bureau of China show that retail sales and industrial output have declined in May compared to April, indicating weakening consumer confidence and declining industrial activity. Real estate investment has also plummeted, with new housing construction experiencing a significant decline.
According to experts, China is experiencing a drop in demand across various sectors, leading to deflation. The Chinese Communist Party’s reliance on printing money to stimulate the economy has resulted in a worsening fiscal deficit at both the local and central government levels. Despite previous interest rate cuts, China’s economy continues to decline, along with its exports.
In conclusion, Goldman Sachs and other financial institutions have revised their growth forecasts for China due to the country’s macroeconomic problems, weakening consumer confidence, and declining industrial activity. The Chinese communist regime’s stimulus measures are unlikely to be effective in addressing these challenges, and experts believe that the country’s economy will continue to face difficulties in the future.