Second largest economy in the world China So the alarm bell is constantly ringing. Big US companies are leaving the country and setting up their manufacturing units in India, on the other hand, the economic condition of the country is not improving.
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At the beginning of 2023, it was believed that if the market is opened by removing China's zero covid policy, the economy may show signs of recovery, but the latest report from Goldman Sachs has given sleepless nights. The financial services provider cut its GDP growth forecast. Let us also tell you what the agency has to say about this.
So little guessed
In its report, Goldman Sachs has reduced China's GDP estimate from 6 percent to 5.40 percent, i.e. 60 basis points. Economists in their report said that the way China implemented the policy in the previous recession, this time also does not seem to provide any relief.
Talking about the country's ever-shrinking population and ever-increasing debt, the report said China could once again be targeted for property and infra growth. The report said that relying only on property and infrastructure is not enough to improve China's economic situation. This will require some other steps to be taken.
China's economic recovery is very slow
According to sources, the central government may also issue special bonds to finance many projects. However, last week's report showed that the pace of China's economic recovery is too slow. The central bank has tried to boost sentiment by cutting interest rates.
The government invested a lot of money in the property market
On the other hand, on Friday last week, China's State Council i.e. Cabinet said that a strong and effective policy is being worked on and will be implemented in due course. The Cabinet said that new solutions for the policy are being explored. This time the government will not work towards the redevelopment of Zuggi Zopari, as was seen in the year 2015. At that time the government invested a lot of money in the property market and also compensated the people. Due to which property prices and sales surged.
Experts in Goldman's report say that the government may issue special bonds for local institutions with speed. This bond will be used infra. Officials can keep property policies simple. On the other hand, focus can also be placed on sectors that boost the economy. This includes manufacturing and new energy.
