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Goldman Cuts China’s Growth Forecast to 4% on Covid Policy

  • Avoiding Shanghai-type lockdown is key to meeting growth goal
  • ‘Statistical smoothing’ could help boost growth rate
Updated on

Goldman Sachs Group Inc. cut its economic growth forecast for China for this year to 4% as the government doubles down on a Covid Zero policy that’s forced major cities like Shanghai into lockdown for several weeks.

The investment bank lowered its projection for gross domestic product growth from 4.5% previously, and also cut the second-quarter estimate to 1.5% year-on-year from an earlier prediction of 4%. Full-year growth is based on the assumption that Covid will remain mostly under control, that the property market improves and the government boosts infrastructure spending, Goldman’s economists including Hui Shan wrote in a note.