From Investing.com (also on blogroll at right) via MSN, June 18:
Investing.com-- Goldman Sachs (NYSE:GS) slashed its economic growth forecasts for China on Sunday, stating that current levels of stimulus from the government will provide less support for the economy than previously thought.
The investment bank cut its forecast for 2023 gross domestic product (GDP) to 5.4% from 6%, joining a growing list of major banks that have cut their bets on a Chinese economic recovery this year.
The bank said in a note released on Sunday that the country’s ongoing stimulus was incapable of generating a strong “growth impulse," and would result in a slower recovery despite the lifting of anti-COVID measures earlier this year.
Goldman Sachs also slashed its outlook for second quarter GDP to quarter-on-quarter growth of 1% from 4.9%, but forecast an improvement in the second half of the year on potentially more stimulus measures....
....MUCH MORE
That 'the country’s ongoing stimulus was incapable of generating a strong “growth impulse,"' line is what we were trying to communicate last week. From June 14's "What's that Got To Do With The Price Of Pork In China?":
....The negative spin on the rate cut would be the one we used on Tuesday, that it's classic "pushing on a string" i.e. the problem isn't the cost of money but rather the lack of demand for money.
In this sort of situation, if the money isn't going into domestic demand in will go into financial assets. In the West the Central Bankers say about that reality "We meant to do that, it's the Wealth Effect' whereas it's actually the Cantillon Effect where the people who get the money first get to take advantage of prices that haven't yet moved and are thus lower for them than for those who follow them in.....
Though Chinese and most other Asian markets are lower today they were on something of a tear last week, an anticipatory tear for sure but front-running well advertised central bank moves is an age-old practice.
