Economists at Goldman Sachs and Citigroup said that given the latest data on Chinese industrial production, they decided to revise downwards China's GDP growth forecasts for 2024.
On Saturday, the National Bureau of Statistics of China reported that industrial production growth slowed to 4.5% per annum in August from 5.1% per annum in July. It was the softest expansion in industrial output since March, marking the fourth straight month of a slowdown. Economists had expected industrial production to grow by 4.8% per annum. Overall, recent data indicating weak economic activity in August highlighted the need for further stimulus measures to support demand.
Goldman Sachs economists lowered their forecast for China's economic growth for the current year to 4.7% from 4.9%, while Citigroup lowered its forecast by 0.1% to 4.7%.
"We believe that the risk that China will not reach the full-year GDP growth target (about 5%) is growing, and therefore the need for additional measures to stimulate demand is also increasing," Goldman Sachs economists said, adding that next year China's economy is likely to expand by 4.3% (unchanged from the previous forecast).
Meanwhile, Citigroup economists now expect China's economy to expand by 4.2% in 2025 (-0.3% compared to the previous forecast). Economists said they lowered their forecast due to a lack of major catalysts for domestic demand.