Goldman cuts its forecast for China to 5.2%. Practically recession …
Goldman, in a statement released last Sunday, admits that China has entered a phase of "temporary stagflation," but has even cut its 2022 GDP forecast from an already low 5.8% to just 5.2% . We are far from the 6.4% that is considered the minimum growth for Beijing, and this will make the Chinese very angry.
Goldman first summarizes the stagflation dynamics of the third quarter just ended, in which only China's real GDP growth slowed to an annual rate of 0.8% while, at the same time, PPI inflation, at output, reached 10. , 7% yoy in September, the highest ever recorded.
As if to apologize, however, Goldman states that the Chinese stagflation is different from the western one of the 1970s, as if an oil shock were different depending on the part of the world. More than on the problems of the Chinese economy, Goldman seems to be focusing on the need to demonstrate that all this is only temporary … " the weakness in growth in the third quarter was driven by a number of factors, including the August Covid epidemic. hit many provinces, the sharp slowdown in the housing market and the power shortage and power outages in late September. We believe the Covid epidemic probably played the most important role in negatively impacting third quarter business, followed by property and energy . " Too bad that some of these causes are still well present, both when we consider Covid-19 and energy.
However, there remain some serious facts that the Business Bank presents and which it cannot ignore: first of all the productive sectors, all of them, are providing much lower performance than previously expected. Virtually the entire Chinese economy, except agriculture, which has overcome the swine fever crisis, is under performace:
In the end, the forecasts cannot help but consider the objective data of production, the boom in the prices of raw materials and energy, the interruptions in the production chain, and then we have the forecast of growth of only 5.2% in 2022.
Goldman struggles to say that it is only a temporary slowdown, except that the forecasts for the following years are still very low. Furthermore, in the face of a European and Western slowdown in general, where will the Chinese goods that are the basis of its growth be exported?
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The Goldman article cuts the forecast for China to 5.2%. Practically recession… it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/goldman-taglia-le-previsioni-per-la-cina-al-52-praticamente-recessione/ on Mon, 25 Oct 2021 10:00:34 +0000.