Goldman Sachs Lowers China's Economic Growth Forecast to 5.2% for Next Year

"Chinese Government Focuses on Long-Term Goals Like Reducing Real Estate Debt"...Seems to Judge Low Possibility of Short-Term Stimulus

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Goldman Sachs has lowered its forecast for China's economic growth rate next year from 5.6% to 5.2%, Bloomberg reported on the 25th (local time).

Goldman Sachs lowered the growth forecast, noting that the Chinese government is focusing on long-term policies such as reducing real estate debt. Despite the recent economic slowdown, it is expected that the government will not introduce short-term economic stimulus measures.

Due to the liquidity crisis of Evergrande Group, China's second-largest real estate developer, the real estate market, which accounts for more than 20% of China's gross domestic product (GDP), is rapidly cooling down. China's economic growth rate, which recorded 7.4% in the second quarter, sharply dropped to 4.9% in the third quarter. Goldman Sachs stated that the growth rate is expected to fall to 3.1% in the fourth quarter.

Goldman Sachs explained, "The long-term direction of government policies such as reducing real estate debt has not changed," adding, "The news that some cities have decided to selectively pilot a real estate holding tax is evidence of this."

According to the state-run Xinhua News Agency, China plans to pilot the introduction of a real estate holding tax. The Standing Committee of the National People's Congress (NPC) passed a "Decision on the Reform of Real Estate Tax in Some Regions" on the 23rd. The NPC delegated the authority to prepare detailed regulations and implement them to the State Council, a government organization, and requested that the State Council select pilot regions considering the real estate market situation.

This content was produced with the assistance of AI translation services.