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Growth forecasts from Goldman Sachs
Goldman Sachs sees the global economy growing 4.5% next year as the recovery from covid-19 continues. That’s in line with estimates but the composition diverges.
In particular, they see the UK growing at 5.3% compared to the 5.0% consensus while they forecast China at 4.8% compared to 5.5% expected. The see that paradigm continuing into 2023 as well.
On China they say:
The key driver of this muted outlook is a negative swing in the property
sector growth impulse from an average of +1½pp in the last five
pre-pandemic years to just above -1pp in 2022 and beyond. This reflects
the negative impact of deleveraging on construction, consumption,
government spending, real estate services, and construction materials
activity
They note that China would have previously stimulated aggressively but now they’re content to ‘just do enough’ to stem downward risks as they put less weight on GDP growth and more on income distribution, financial stability and the environment.