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China’s growth is likely to moderate in the next few months, Goldman Sachs says

China’s growth is likely to moderate in the coming months as the country faces risks on two fronts, according to the chief Asia economist of Goldman Sachs. “The first is simply policymakers are quite comfortable with the recovery so far and are starting to pull back on policy stimulus to some degree,” Andrew Tilton said on “Streets Signs Asia” on Monday.

“If things do continue to go well, then we could have some inflation risks,” he added. China is expected to show “spectacular” gross domestic product numbers in the first quarter this year. The world’s second largest economy showed robust GDP growth in the fourth quarter of 2020, expanding at 6.5% compared to a year ago. It beat market expectations, and made China one of the few major economies in the world to record positive growth for a year mired by the coronavirus pandemic.

Explaining Chinese policymakers’ move to pull back on stimulus, Tilton said: “Credit growth has slowed, fiscal deficit has come in and lately, there’s been a tightening of liquidity, to stem what they may view as excessive speculation in the markets.”

China’s growth is likely to moderate in the next few months, Goldman Sachs says, CNBC, Feb 2

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