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- China’s growth is likely to moderate in the next few months - Goldman Sachs
China’s growth is likely to moderate in the next few months - Goldman Sachs
CNBC reports that according to the chief Asia economist of Goldman Sachs, China’s growth is likely to moderate in the coming months as the country faces risks on two fronts.
“The first is simply policymakers are quite comfortable with the recovery so far and are starting to pull back on policy stimulus to some degree,” Andrew Tilton said.
“If things do continue to go well, then we could have some inflation risks,” he added.
China is expected to show “spectacular” gross domestic product numbers in the first quarter this year.
Explaining Chinese policymakers’ move to pull back on stimulus, Tilton said: “Credit growth has slowed, fiscal deficit has come in and lately, there’s been a tightening of liquidity, to stem what they may view as excessive speculation in the markets.”
The second challenge to China’s growth recovery is a resurgence of local outbreaks, said Tilton.
“The basic argument is that China’s largely normalized. So there’s more downside if there is a renewed spread of the virus and there’s less upside before you start to reach capacity constraints,” he said.
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