ICYMI: Goldman Sachs cut its forecast for China economic growth citing zero covid

Goldman Sachs has cut its forecast for 2022 China GDP to 4% from 4.5% y/y

• & has cut the Q2 estimate to 1.5% y/y (from 4%)

Goldman Sachs says it assumes:

• Full-year growth is based on the assumption that Covid will remain mostly under control
• that the property market improves
• the government boosts infrastructure spending

The Chinese government’s forecast for GDP growth this year is ‘around 5.5%’

• to get close GS says “it is imperative to keep Covid under control and avoid hard lockdowns of major economic centres like Shanghai going forward”

ps. Love this from GS a little further on in the note. The economists at GS say the government could hit its growth target if it uses “statistical smoothing.”

• revisions to previous years’ GDP or “deviations of current year’s GDP growth from alternative measures of economic activity can sometimes take place in difficult growth years,”

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This is worth a shot. The next time you come home drunk tell your wife you are not drunk when its ‘statistically smoothed’.

(please excuse my gender specificity, I’ll go stand in the naughty corner for a while)