Goldman Sachs and Citigroup Lower China's Growth Forecast to 4.7% - What Does This Mean for Your Investments?
In a recent report, Goldman Sachs and Citigroup have revised down their full-year projections for China's economic growth to 4.7%. This comes after China's industrial output slowed to a five-month low in August, raising concerns about the country's economic recovery.
The weakening economic activity in August has put a spotlight on China's slow growth and the urgent need for additional stimulus measures to boost demand. Global brokerages have also adjusted their 2024 projections to below the government's target of around 5%.
Goldman Sachs had previously anticipated full-year growth at 4.9%, while Citigroup had forecasted growth at 4.8%. However, with China's industrial output expanding by only 4.5% year-on-year in August and retail sales growth decelerating to 2.1%, the outlook for the economy has dampened.
"We believe the risk of China missing the 'around 5%' full-year GDP growth target is increasing, necessitating more demand-side easing measures," Goldman Sachs stated in a recent note. Citigroup also trimmed its 2025 year-end GDP growth forecast for China to 4.2% due to a lack of major catalysts for domestic demand.
In conclusion, the downward revision in China's growth forecast by major financial institutions like Goldman Sachs and Citigroup signals potential challenges ahead for the world's second-largest economy. Investors should monitor the situation closely and consider adjusting their investment strategies accordingly to mitigate risks and capitalize on potential opportunities in the market.