Goldman cuts Chinese GDP growth forecast due to energy supply crisis


Power lines and wind turbines are pictured at a wind and solar energy storage and transmission plant of the State Grid Corporation of China in Zhangjiakou, Hebei Province, China on March 18, 2016. REUTERS / Jason Lee

SHANGHAI, Sept. 28 (Reuters) – Goldman Sachs lowered China’s economic growth forecast for 2021 to 7.8% from 8.2% as energy shortages and sharp cuts in industrial production add ” significant downward pressure, ”he said in a note on Tuesday.

The power shortage, caused by environmental controls, supply constraints and soaring prices, has forced industries across the country to cut back on production and forced several provinces to scramble to secure electricity and electricity. heating for residents. Read more

Goldman Sachs estimated that up to 44% of China’s industrial activity was affected, leading to a 1 percentage point drop in annualized GDP growth in the third quarter and a 2 percentage point drop in October. to December, he said.

The Chinese economy is already grappling with brakes in the real estate and tech sectors and concerns about the future of cash-strapped real estate giant China Evergrande (3333.HK).

“Considerable uncertainty remains regarding the fourth quarter, with both upside and downside risks related primarily to the government’s approach to managing Evergrande stresses, to the extent of the application of environmental goals and the degree of policy flexibility, ”Goldman added.

(This story has been passed on to remove the repeated word in the title)

Reporting by David Stanway; Editing by Kim Coghill

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