China’s faster than expected recovery after abandoning its policy of severe public health restrictions will drive higher global economic growth, says research from Goldman Sachs. In a report, the firm’s analysts boosted their forecast for China’s GDP growth to 6.5 per cent in 2023 and indicated that the sharp recovery and robust domestic demand in China could add one percentage point to global GDP this year. “The global growth backdrop has brightened,” it says. “While we already expected most major economies to avoid recession and China to see a growth rebound from an end to zero-COVID, the more rapid pace of China’s reopening since then – along with a waning drag from global financial conditions and lower European gas prices – has prompted us to upgrade our expectations further.” China’s strong recovery will affect global growth through several channels, including resurgent demand in China due to reopening, increased international travel, and stronger commodity demand.
- PWC