Goldman Sketch Out Expectations For China’s ’24 Economic Targets

Goldman Sachs note that “senior policymakers will likely hold a Politburo meeting in early December and then the Central Work Economic Conference (CEWC) in mid-December to discuss economic policy stance and to decide on a series of economic targets for 2024.”

• They go on to flag that “potential growth is likely on a decelerating trend, but an ambitious growth target could help mitigate the risk of China falling into a self-fulfilling cycle of downbeat expectations, further depressing growth and reinforcing the pessimistic expectations."
• "Recent media reports suggest policymakers are likely considering an "around 5%" real GDP growth target for 2024. We forecast China real GDP growth to be 4.8% yoy in 2024 on the back of our expectation of "around 5%" real GDP growth target next year.”
• “We expect the official on-budget fiscal deficit to be 3.2% of GDP in 2024, lower than in 2023 and 2020 but the same as the 2021 level. However, the actual amount of on-budget government bond proceeds available next year should be notably larger (3.6% of GDP) next year than this year (3.4%), as RMB500bn out of the RMB1tn additional CGB issuance this year is planned for spending early next year."
• "The LGSB quota is likely to increase to RMB4.2tn in 2024 from RMB3.8tn in 2023. In addition, local governments may continue to tap into their unspent bond issuance quota accumulated from previous years to swap their implicit debt if needed.”