U.S. investment bank Goldman Sachs (GS) has cut its forecast for China’s economic growth this year to 5.4% from 6% previously.
Economists at Goldman Sachs cite several macroeconomic indicators that show the nation of 1.4 billion people is seeing its economy slow even as it emerges from Covid-19 restrictions.
Goldman Sachs’ downgrade of China’s economy follows similar forecast cuts by Bank of America (BAC) and JPMorgan (JPM), each of which also sees a pronounced slowdown in the world’s second biggest economy.
U.S. banks have also noted that pressure is building in China’s property sector, further hurting the economy.
While Goldman Sachs expects further government stimulus measures, it notes that the spending will not be enough to overcome the greatest problem China’s economy faces: weak consumer sentiment.
Goldman Sachs also sees further weakness in the Chinese yuan against the U.S. dollar in the months ahead.
The stock of Goldman Sachs has increased 19% over the last year to $338.31 U.S. per share.
