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Goldman Assess The Latest Round Of Policymaker Communique

CHINA
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Goldman Sachs note that the “teleconference held by Premier Li, this week's State Council meeting and the PBOC's teleconference all suggest that policymakers in China are in greater urgency to support the economy, under the backdrop of very weak activity growth, anaemic recovery month-to-date in May, and rising unemployment rates. Premier Li's requirement on “achieving positive year-over-year economic growth in Q2" and the statement that "Q2 economic indicators should show the actual underlying growth momentum" may also be an implicit acknowledgment that the "around 5.5%" growth target set in early March this year is very challenging. Barring another major wave of Covid resurgence, we do expect growth to show a solid rebound in June and Q3 under policy support. However, downward growth pressures remain high amid Covid control and the very sluggish property sector. Policymakers might also announce additional easing measures in the near future should growth disappoint or the unemployment rate continue to climb.”

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Goldman Sachs note that the “teleconference held by Premier Li, this week's State Council meeting and the PBOC's teleconference all suggest that policymakers in China are in greater urgency to support the economy, under the backdrop of very weak activity growth, anaemic recovery month-to-date in May, and rising unemployment rates. Premier Li's requirement on “achieving positive year-over-year economic growth in Q2" and the statement that "Q2 economic indicators should show the actual underlying growth momentum" may also be an implicit acknowledgment that the "around 5.5%" growth target set in early March this year is very challenging. Barring another major wave of Covid resurgence, we do expect growth to show a solid rebound in June and Q3 under policy support. However, downward growth pressures remain high amid Covid control and the very sluggish property sector. Policymakers might also announce additional easing measures in the near future should growth disappoint or the unemployment rate continue to climb.”