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Goldman cuts China’s growth forecasts, citing power crunch as ‘yet another growth shock’

Goldman said production cuts among manufacturers and less fiscal support mean that the Chinese economy will grow at a slower pace in the third and fourth quarters this year.

The bank expects China’s economy to grow 4.8% in the third quarter of 2021 compared to a year ago, and 3.2% in the fourth quarter. Previously, Goldman’s forecasts were 5.1% and 4.1% for the third and fourth quarters, respectively.

China said its economy grew 7.9% year-on-year in the second quarter this year.

Impact on Asia-Pacific

Rising uncertainty in the Chinese economy will affect economic growth prospects across Asia-Pacific, ratings agency S&P Global Ratings said Tuesday.

The agency downgraded its 2021 growth forecast for China to 8% from 8.3%. It also cut its growth projection for Asia-Pacific to 6.7% for this year from 7.5% previously.

Reference: CNBC

Read More: Goldman Sachs cuts China's GDP growth forecasts amid energy crunch (cnbc.com)