Goldman Sachs lowers China growth forecast after other major Wall Street banks do the same.

The global investment banking and management firm, Goldman Sachs, has joined several other Wall Street banks in reducing its growth outlook for China. This downgrade comes as China battles the effects of the coronavirus pandemic, which have resulted in a dwindling economy.

Goldman Sachs has reduced the growth outlook for China’s full-year 2023 GDP (gross domestic product) to 5.4% from 6%, and that of 2024 to 4.5% from 4.6%. The Goldman economists, led by Chief China Economist Hui Shan, said in a Sunday research note:

“With continued challenges from the property market, pervasive pessimism among consumers and private entrepreneurs, and only moderate policy easing to partially offset the strong growth headwinds, we mark down our 2023 real GDP forecast.”

Several other institutions, including Bank of America, JPMorgan, Standard Chartered, and UBS, have also cut their growth outlook for China. According to the economists from Goldman Sachs, multiple issues continue to plague China’s growth outlook, including debt problems, demographics, a property downturn, and geopolitical tensions.

The Chinese government has put its GDP growth for the year at 5%, but Wall Street institutions are not optimistic. For instance, China’s recent reduction in its repurchase rate points to more easing, which will cause rate differentials and eventually weaken the Yuan against the Dollar.

UBS also has a weak outlook, pointing to problems with China’s property sector, which are strong enough to dampen the growth outlook. In February, Goldman Sachs analysts had projected that stocks in China could rise up to 24% before 2023 runs out, but the current situation seems to have changed their outlook.