Goldman Sachs Sees Firmer Near Term Growth Momentum

The US bank sees China's growth target for 2023 being hit. It has also nudged higher its sequential growth forecast for Q4 growth this year, see below for more details. Growth is forecast to be slower in 2024 and 2025, see below.

• " In our view, Q3's sequential growth improvement was driven by diminishing drag from inventory destocking, increased policy offset and stabilizing exports, which should linger at least through the remainder of this year. The +4.9% yoy GDP growth in Q3 also implies the government's "around 5%" full-year growth target is almost secured, given a low base for Q4 due to China's Covid "exit wave" last year. Taking into consideration the likely lagging effect of recent policy easing (which has intensified since late August) and solid high-frequency data for the first half of October, we slightly raise our sequential growth forecast for Q4 (to 5.5% qoq sa annualized from 5.0% previously) but maintain those for the following quarters. However, NBS revisions to historical sequential growth estimates mechanically lower our 2023 full-year GDP growth forecast marginally to 5.3% from 5.4% previously. Our 2024 and 2025 growth forecasts remain unchanged at 4.5% and 4.0%, respectively. These forecasts embed our assumption that policy easing on monetary, fiscal and property fronts will continue in coming months given the ongoing property headwinds and still-fragile confidence."