Askume, Sep 16 – Goldman Sachs and Citigroup cut their full-year economic growth forecast for China to 4.7% as industrial output in the world’s second-largest economy fell to a five-month low in August.
Weak economic activity in August raised concerns about China’s slow economic recovery and highlighted the need for more stimulus measures to boost demand.
Sluggish growth has prompted global brokerages to lower their 2024 forecasts to about 5%, below the government’s target.
Goldman Sachs had forecast full-year economic growth at 4.9%, while Citigroup had predicted 4.8%.
Data released by the National Bureau of Statistics (NBS) on Saturday showed China’s industrial output grew by a year-on-year 4.5% in August , slowing from a 5.1% rise in July and the lowest increase since March.
Retail sales, a key indicator of consumption, rose 2.1% in August, down from a 2.7% increase in July during the peak tourist season and summer travel period. Analysts had expected weak retail sales to rise 2.5% for the full year.
“We believe there is a growing risk that China will not achieve its full-year GDP growth target of ‘around 5%’, and therefore demand will be dampened,” Goldman Sachs said in a Sept. 15 report. Access Easy.
Maintain the country’s GDP growth forecast at 4.3% in 2025.
However, Citigroup on Sunday lowered its forecast for China’s GDP growth for the end of 2025 to 4.2% from 4.5% due to a lack of major catalysts for domestic demand.
Citigroup economists said, “We believe fiscal policy reform is needed to break the austerity trap and support long-term growth.”
