Goldman Sachs Group Inc. has revised its economic growth forecasts for China in 2024 and 2025, following the government’s recent announcement of measures aimed at boosting growth, including increased public spending unveiled over the weekend. The bank now expects China’s gross domestic product (GDP) to grow by 4.9% this year, an increase from its previous estimate of 4.7%. Additionally, it has raised its 2025 growth forecast to 4.7%, up from 4.3%, as detailed in a report released on Sunday.
The Goldman economists, including Hui Shan, noted, “The latest round of stimulus from China clearly reflects a shift in policymakers’ approach to cyclical policy management, emphasizing a renewed focus on economic stability.”
This upgrade comes at a time when economists and investors are evaluating the potential impacts of Beijing’s efforts, initiated in late September, to revitalize an economy grappling with weak sentiment and persistent deflationary pressures. During a much-anticipated briefing on Saturday, the Finance Ministry committed to enhancing fiscal support; however, it did not outline specific steps aimed at stimulating consumption, which some analysts argue are essential for combating deflation.
Finance officials announced that 2.3 trillion yuan (approximately $325 billion) in local government special bond funds will be allocated for use in the fourth quarter, indicating a more “back-loaded” public spending strategy and a stronger economic rebound than Goldman had previously projected.
Additionally, the National Development and Reform Commission (NDRC), China’s top economic planning agency, revealed plans to pre-approve investment projects worth 200 billion yuan for next year by the end of this month. This initiative is aimed at achieving the government’s GDP growth target of “around 5%” for this year, according to Goldman’s analysis.
The easing measures announced and anticipated are expected to contribute an additional 0.4 percentage points to economic growth next year, helping to counterbalance a projected 1.9 percentage point decline due to slowing exports and a continued downturn in the property sector, as outlined in the report.
However, Goldman Sachs cautioned that structural challenges facing China persist, and it has kept its forecasts unchanged for 2026 and beyond. The economists pointed out that the “3D” challenges—deteriorating demographics, a prolonged trend of debt deleveraging, and a global push to de-risk supply chains—are unlikely to be mitigated by the recent policy easing.
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