Goldman Sachs: Expects the People's Bank of China to Implement Another "Double Cut" in Q4

According to TechFlow from ShenChao and data reported by Jinsi, Goldman Sachs has revised upward its forecast for China's export growth in its latest research report, expecting the actual export growth rate in 2025 to be basically flat compared to 2024, whereas the previous forecast predicted a year-on-year decline of 5%. The current account surplus as a percentage of GDP was also revised up from 1.7% to 2.3%.

Regarding monetary policy, in another research report released on the same day, Goldman Sachs believes that following the recent "dual cuts" (reserve requirement ratio cut and interest rate cut) by the People's Bank of China, another "dual cut" is expected in the fourth quarter (50 basis points RRR cut + 10 basis points interest rate cut), with two additional interest rate cuts of 10 basis points each possible in 2026.

Based on the assumptions regarding China's export growth in 2025 and monetary policy, Goldman Sachs also upgraded its forecasts for China's GDP quarter-on-quarter growth rate in the second quarter and the second half of this year, and increased the full-year actual GDP growth rate forecast for 2025.