Goldman Sachs has upped its forecast for China’s gross domestic product (GDP) growth this year off the back of signs its economy’s recovery is picking up pace.
Strong recovery in sectors sensitive to the Covid-19 pandemic and broadly improved activity data in the first two months of this year drove the upgraded outlook, Goldman Sachs said in the research note, as it raised its GDP forecast to 6% from 5.5%.
China’s economy showed a gradual, though uneven, recovery in January and February, but statistics bureau spokesman Fu Linghui told a briefing on Wednesday that it would take time to repair corporate and personal balance sheets damaged during the pandemic.
China has set a modest annual growth target of around 5% this year after significantly missing its target for 2022.
Last year, the world’s second-largest economy expanded just 3%, its slowest pace in decades excluding 2020, weighed down by restrictive Covid policies, a deep property slump and weak external demand.
Goldman Sachs also cited improved activity in the real estate sector, which has made new progress in its climb out of a months-long slump, as another reason for its revised forecast.
The investment bank last raised its forecast for China’s 2023 GDP growth in January to 5.5% from a previous estimate of 5.2%.
- Reuters with additional editing by Sean O’Meara