Goldman Sachs Revises Chinese GDP Lower, as Chinese Officials Expect More Coronavirus Cases This Month

Posted Tuesday, February 11, 2020 by
Skerdian Meta • 1 min read

Coronavirus cases keep increasing in China, heading towards 50k, while deaths have surpassed 1,000. New cases keep coming and the situation is getting worse, but the sentiment is not as bad as in January. Chinese officials expect a further increase this month, but then the virus will flatten out.

Goldman Sachs expects the Chinese economy to slow down to 5.2%, but considering that the effects of the virus on the economy are greater, I think that the GDP will slow down further.

Remarks From Chinese Government Medical Advisor, Zhong Nanshan

  • Virus outbreak may peak later this month and then plateau
  • Based on current models and trend
  • The new coronavirus has been very contagious up to this point, compared to SARS
  • It is unclear if the virus is being spread by ‘super-spreaders’
  • China needs stronger, more powerful disease control system
  • Situation is improving in some provinces, with new diagnoses declining

Goldman Sachs Report

  • Goldman Sachs downgrades 2020 China growth forecast to 5.2% from 5.8% previously
  • The downgrade reflects a sharp deterioration in Q1 activity
  • But points to high degree of uncertainty surrounding this growth revision
  • Will review its forecast as developments evolve
  • Need to gauge the size of the economic drag from the virus outbreak
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