The Hong Kong edition of financial news site Investing.com recently reported that Goldman Sachs has downgraded China’s economic growth forecast to reflect ongoing trade tensions with the United States. Following U.S. President Trump’s decision to raise tariffs on goods imported from China to 145 percent, Goldman Sachs now expects China’s actual GDP to grow 4.0 percent in 2025 and 3.5 percent in 2026, down from the previous forecasts of 4.5 percent and 4.0 percent, respectively.
Goldman Sachs estimates that the increasing effective U.S. tariffs beginning under President Trump’s first term may have reduced China’s actual GDP growth levels by as much as a cumulative 2.6 percentage points, including a 2.2 percentage point blow to China’s 2025 GDP growth numbers. The investment bank also expects that the Chinese authorities will respond to mounting economic pressure by introducing more stimulus policies. The bank adjusted its forecast for “expansion of the Chinese financial deficit” to 14.5 percent of GDP, up from 10.4 percent in 2024.
Goldman Sachs expressed the belief that even major easing policies by the Chinese government would likely not completely offset the negative impact of U.S. tariffs on the Chinese economy. The investment bank stressed that some 10 to 20 million Chinese workers may be impacted by reduced exports to the U.S., triggering higher pressure in the Chinese employment market.
Source: Investing.com, April 10, 2025
https://hk.investing.com/news/economy-news/article-882499