Goldman Cuts China Growth Forecast

Goldman Sachs has become the latest bank to downgrade its gross domestic product (GDP) growth forecast for China, noting the world’s second largest economy faces a “bumpy road ahead.”

The bank lowered its 2014 forecast to 7.3 percent from 7.6 percent late Wednesday. It also cut its 2015 outlook to 7.6 percent from 7.8 percent.

“Both trade and consumption – factors that we had expected to provide positive support to growth this year – disappointed in the first two months of 2014, relating to the anti-corruption efforts, which affected consumption, and the soft DM (developed market) recovery,” economists led by Li Cui, managing director, China Macro Research at the bank wrote in a note.

“The exit of overcapacity sectors, along with the emerging default cases in the related sectors, are negatively impacting growth in the near term but are necessary from a longer-term perspective by allowing proper signals to dampen wasteful investment,” they added.

via CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.