Nomura and Goldman Sachs further revised down their forecasts for China’s economic growth this year.
In particular, Nomura revised its forecast for GDP in the world’s second-largest economy to 2.8% from 3.3% previously, citing the latest economic data outside the country.
With the move, Nomura continues to give the lowest forecast among investment houses, echoing its pessimism that Beijing can meet its economic growth target of 5.5 percent this year. In July, Chinese officials said the country might miss its GDP target this year.
Nomura attributes worsening headwinds to the current economic cycle as well as the fact that China is facing its worst heat wave in years, which could weigh on growth in the third quarter.
Goldman Sachs followed suit, also downgrading its forecast for Chinese GDP to 3% from 3.3% previously, citing the latest economic data showing falling demand and sluggish credit growth, but also the recession in the real estate sector.
The pending revisions to China’s 2022 economic growth estimates follow the People’s Bank of China unexpectedly cutting interest rates on Monday, for the second time this year.