Goldman Sachs Thursday renewed its forecast regarding China’s gross domestic product (GDP) growth, saying the country is likely to rebound by the second half of 2023 and into 2024, according to a Bloomberg report.
The report said the forecast was based on assumptions that the country is likely to begin reopening in April next year from strict coronavirus measures as part of Beijing's “zero-COVID policy.”
Annualized quarter-on-quarter growth is expected to reach 10% in the June-September period next year from just 2% in the second quarter, Goldman’s economists estimated. Accordingly, they expect to grow by 4.5% in 2023, rebounding from an expected 3% this year and to further expand by 5.3% in 2024.
‘’The Chinese economy is likely to display a distinct ‘two halves’ next year,’’ the report stated, adding that the country is set to stay beneath full-year growth acceleration.
They also pointed out that China's growth is expected to experience a similar pattern of growth as other East Asian economies including South Korea, Taiwan and Hong Kong have seen this year.
These economies’ real private consumption fell during the first quarter of their respective reopenings, yet was followed by a recovery in the second quarter as COVID-19 case numbers dropped and the fear factor faded away.
China’s fiscal policy to stay accommodative in the first half of next year before normalizing in the following six months, when consumption and services are expected to “rebound sharply,” according to Goldman Sach.
It also predicted that the weak global demand is likely to reflect as a decrease in Chinese exports with a 2% shrinkage in 2023 after increasing by 8.5% this year.
China's economy rebounded at a faster-than-anticipated clip in the third quarter this year, but a more robust revival in the longer term is still challenged by its COVID-19 policy.
