Goldman Sachs Sees China Rate Cut as Growth Risks Mount
A fourth-quarter interest rate cut from the People's Bank of China is likely as policymakers move to support slowing economic momentum.
Goldman Sachs analysts are forecasting that China's central bank will likely cut interest rates in the fourth quarter, signaling that Beijing is preparing to deploy more monetary stimulus to combat slowing economic growth. The move is anticipated as policymakers face mounting pressure to support the nation's recovery amid a persistent property crisis and tepid consumer demand.
The prediction comes as China navigates a complex economic landscape. The government has set an ambitious , a goal that many economists believe is increasingly challenging without additional support. The People's Bank of China (PBoC) has already implemented several easing measures this year, including reductions in bank reserve requirements to boost liquidity and encourage lending.
According to a report from the investment bank, the expected easing in the final months of the year aims to further reduce borrowing costs and stimulate investment. This follows a series of policy adjustments designed to reignite momentum that has faltered since the country's post-pandemic reopening. These challenges have been compounded by a prolonged downturn in the real estate sector, which remains a significant drag on the economy.
The potential for a rate cut underscores the cautious sentiment surrounding the world's second-largest economy. While officials have rolled out various support packages, from fiscal spending to monetary easing, their impact has been limited. Analysts widely believe that more decisive action is needed to restore confidence. to ensure the recovery stays on track, a sentiment echoed by other institutions who point to the need for both monetary and fiscal coordination to address .