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Goldman Lowers China 2022 Growth Forecast to 4.3% on Omicron

Goldman Sachs Group Inc. cut its forecast for China’s economic growth this year to 4.3% due to the increased difficulty of containing the more-contagious Omicron coronavirus variant.
The downgrade from the bank’s previous projection of 4.8% incorporates a 0.9 percentage point drag from Covid-related restrictions, which will be partly offset by monetary and fiscal easing, economists including Goldman’s chief China economist Hui Shan said in a note.
The negative impact from infections and restrictions as China pursues a policy of virus elimination will mostly be felt in the first quarter of 2022, the economists said. They see a rebound in the following three months, assuming that outbreaks can be controlled more easily after the winter months and as booster vaccinations are more widely deployed.
China confirmed its first locally transmitted cases of Omicron in the last week, leading to tightened travel restrictions and business closures in areas where the cases have been found. Goldman’s forecast is below the median projection of 5.2% growth for the world’s second-largest economy seen in a Bloomberg survey of economists
Jan 12, 2022 11:03
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