Goldman Cuts China GDP Growth Forecast Amid Energy Squeeze; Evergrande Uncertainty Persists

Goldman Cuts China GDP Growth Forecast Amid Energy Squeeze; Evergrande Uncertainty Persists

Goldman Sachs has lowered its forecasts for China's GDP growth for the remainder of 2021 and into 2022, describing the impact of energy constraints sweeping the country as "yet another growth shock." Goldman now expects China's GDP to grow by 4. 8% in the third quarter from a year earlier, down from its earlier prediction or 5. 1%, according to a new report. Fourth quarter GDP growth is predicted to be 3. 2% from a year earlier compared with an earlier forecast of 4. 1%. Growth of 3. 2% would be China's lowest since the second quarter of 2020, when the country was in the early phase of recovery from the Covid-19 pandemic. China, the world's populous nation, boasts its second-largest economy after the United States, and changes in its economic activity affect a swath of global markets. "Recent sharp cuts to production in a range of high-energy-intensity industries add to the already significant downside pressures in the growth outlook," Goldman said. Energy constraints have emerged as regulators move to meet targets for energy consumption and intensity, Goldman said. "Considerable uncertainty remains with respect to the fourth quarter, with both upside and downside risks relating principally to the government's approach