Goldman Sachs, Citigroup Cut China's 2024 Growth Forecast To 4.7%

Goldman Sachs and Citigroup have lowered their full-year projections for China's economic growth to 4.7 per cent after the world's second-largest economy's industrial output slowed to a five-month low in August.

Weak economic activity in August has ramped up attention on China's slow economic recovery and highlighted the need for further stimulus measures to shore up demand.

The faltering growth has prompted global brokerages to scale back their 2024 projections to below the government's target of around 5 per cent.

Goldman Sachs earlier expected full-year growth for the economy at 4.9 per cent, while Citigroup had forecast growth at 4.8 per cent.

China's industrial output in August expanded 4.5 per cent year-on-year, slowing from the 5.1 per cent pace in July and marking the slowest growth since March, data from the National Bureau of Statistics (NBS) showed on Saturday.

Retail sales - a key gauge of consumption - rose 2.1 per cent in August, decelerating from a 2.7 per cent increase in July amid extreme weather and a summer travel peak. Analysts had expected retail sales, which have been anaemic all year, to grow 2.5 per cent.

"We believe the risk that China will miss the 'around 5 per cent' full-year GDP growth target is on the rise, and thus the urgency for more demand-side easing measures is also increasing," Goldman Sachs said in a note dated 15 September.

It maintained the country's 2025 GDP growth forecast at 4.3 per cent.

However, Citigroup on Sunday trimmed its 2025 year-end forecast for China's GDP growth to 4.2 per cent from 4.5 per cent due to a lack of major catalysts for domestic demand.

"We believe fiscal policy needs to step up to so as to break the austerity trap and timely deploy growth support," economists at Citigroup said.