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China GDP Forecast Revised | Economic Browser


Even under optimistic assumptions, growth will fall short of the government’s targets.

figure 1: China’s real GDP, 2019Q1=1 (black), Goldman Sachs previous forecast (blue), Goldman Sachs May 18 forecast (red), IMF April World Economic Outlook forecast (sky blue square). Source: National Bureau of Statistics, IMF, Goldman Sachs and author’s calculations.

Goldman Sachs (Shan et al., “How to achieve near 5.5% GDP growth with a zero-pandemic policy?” May 18, 2022) expects a hit to Q2 growth, followed by Q4/Q4 growth in subsequent quarters will be largely back to the same, but slightly lower than the IMF’s April world economic outlook The forecast is 4.8%.

Goldman Sachs

“…the lower growth forecast incorporates the assumption that Covid is largely contained and the housing market improves from here, with the government providing substantial policy offsets through infrastructure spending in the coming months. For example, we expect our augmented fiscal deficit to widen by 3 percentage points this year.”

The predicted Q2 drop is just a reflection of my negative news China Post.

Note that I am taking official statistics at face value. While I have my doubts, it seems — at least in the first quarter — that “statistical smoothing” (a euphemism for GS) isn’t heavily applied to the numbers.See Fernald, Hsu, and Spiegel’s China Cyclical Activity Tracker:

source: Fernald, Hsu, Spiegel, accessed 18 May 2022.

The CCAT indicator is very close to reported GDP, on a y/y basis (for a discussion of quarterly CCAT, see this post).



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