Goldman Sachs, Citigroup See China Missing 5% GDP Growth Target, Share New Forecasts
The forecast was slashed in the backdrop of China releasing lacklustre economic data over the weekend.
(Representative Image. Source: Unsplash)
China is likely to miss its target of accelerating the gross domestic product by 5% in 2024, as per the latest projections shared by Goldman Sachs and Citigroup. Both brokerages have scaled down their growth forecast for China to 4.7%.
In its previous projection, Goldman Sachs saw Asia's top economy growing at 4.9% in 2024, whereas Citigroup had projected the growth rate as 4.8%.
The forecast was slashed in the backdrop of China releasing lacklustre economic data over the weekend. The country's industrial output grew at 4.5% year-on-year in August, which is the slowest since March.
Retail sales, a key metric to assess consumption trends, climbed only 2.1% in August despite a peak in summer travel. This was lower as compared to 2.7% in July.
"We believe the risk that China will miss the 'around 5%' full-year GDP growth target is on the rise, and thus the urgency for more demand-side easing measures is also increasing," Goldman Sachs stated in a note dated Sept. 15.
For 2025, Goldman Sachs has retained its growth forecast for China at 4.3%. However, Citigroup slashed its forecast for next year to 4.2% from 4.5%, citing the lack of pickup in domestic demand.
"We believe fiscal policy needs to step up so as to break the austerity trap and timely deploy growth support," news agency Reuters quoted Citigroup's economists as saying in its note.
China's economy, plagued by a real estate crisis and lull in domestic demand, has failed to take off after the Covid-19 disruption. Data released by the country's National Bureau of Statistics on Saturday showed year-on-year housing prices falling at their fastest pace in nine years and urban unemployment rising to a six-month high.
