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Goldman Sachs: Global GDP growth slows down next year. RMB will not depreciate for a long time.

November 08, 2018 20:38
source: First finance
edit:Eastern Fortune Network

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There will be 2 months to enter 2019, before the official release of the 2019 outlook,GoldmanIt is the first to disclose to the market some of the forecasts for global and China's economic growth next year, as well as the outlook for the RMB exchange rate. From November 6th to 8th, Goldman Sachs China Investment Forum was held in Shenzhen in 2018. During the interview with the first financial reporter, Goldman Sachs senior macro economist and managing director Deng Minqiang said that Goldman Sachs for China in 2019GDPThe growth rate is forecast to be 6.1%, which is slower than the 6.6% growth forecast in 2018.

In the face of fluctuations in the RMB exchange rate this year, Deng Minqiang said that Goldman Sachs predicts that the RMB exchange rate against the US dollar may reach 7.1 within six months. The current RMB depreciation is due to a large spread between overseas and “do not myth '7',” Deng Minqiang believes. In the short term, the small depreciation of the renminbi is affordable, and the probability of a long-term sharp depreciation is small. The outlook for the renminbi is still optimistic.

Global economic growth will slow down in 2019

According to Goldman Sachs' latest forecast, global real GDP growth rate will be 4.0% in 2018 and will slow down to 3.8% in 2019. This is in line with the growth rate in 2017. Deng Minqiang said that although the growth rate has slowed down next year, in the long-term comparison, 3.8% of global economic growth is still at a high level.

Among them, the GDP growth rate of developed economies in 2018 is expected to be 2.4%, which will slow down to 2.2% in 2019; the growth rate of emerging markets is about 5.4% this year, and Goldman Sachs forecasts that it will slow down to 5.2% next year. Among the G3 economies (the United States, the European Union, and Japan), Goldman Sachs believes that the US economy will grow faster than the developed economies, but below the global average growth rate, the US GDP growth rate will be 2.9% in 2018, and will slow down to 2.6 in 2019. %. EU economies and Japan's GDP growth rate this year is 2.1% and 1.1%, next year is expected to reach 1.8% and 1.2%

For China's outlook, Goldman Sachs forecasts that China's GDP growth rate will be 6.6% in 2018, down from 2017. Looking forward to 2019, Goldman Sachs expects China's GDP growth rate to slow further to 6.1%.

Goldman Sachs believes that the current growth rate of emerging Asian economies has slowed down, mainly due to foreign exchange pressure. Faced with the Fed’s rate hike, emerging Asian economies are generally facing downward pressure from the economic constraints.

Boost consumption and focus on savings rate

Facing the short-term pressure of the domestic economic cycle, promoting consumption is the general trend. According to Deng Minqiang, the current level of consumption growth of Chinese residents is not obvious. According to Goldman Sachs statistics, the per capita wealth of Chinese residents is 7 times of annual income, but real estate accounts for about 70% of total wealth. Therefore, despite the high savings rate of residents, the financial situation is Not strong enough.

Tax cuts are an important aspect of measures to boost consumption. Since the beginning of this year, the Ministry of Finance has implemented several rounds of tax reduction policies, such as amending the personal income tax law and raising the tax threshold. In October, the Minister of Finance Liu Kun also said that he would pay more attention to the study of larger tax cuts and more obvious reductions. The measures released a more positive fiscal and tax policy signal.

In addition to tax cuts, Deng Minqiang pointed out that it is necessary to continue to reduce the household savings rate. "The savings rate of Chinese residents is about 30%, which has been at a high level in the world."

"Not all money is good for consumption," in Deng Minqiang's view, the high savings rate is directly related to consumer confidence. How to allocate personal wealth can explain the problem to a large extent. Specifically, the allocation of wealth to liquid products with higher liquidity such as demand deposits indicates that residents have full confidence in consumption, whereas if they lack confidence, they will be more equipped with products with lower liquidity such as time deposits.

Comparing the data of recent years, when the assets with lower liquidity grow and the growth of nominal GDP slows down, there is a significant negative correlation between the two. Deng Minqiang also pointed out that the relationship between the liquidity of asset allocation and consumer confidence also applies to enterprises. He believes that despitebankThe credit line is sufficient, but the willingness of enterprises and residents to consume is insufficient, and this trend may continue for several months.

However, in the long run, Deng Minqiang said that overall, China’s GDP growth prospects are not pessimistic. The short-term growth may be based on infrastructure. “When the preferred economic growth momentum – insufficient consumption and exportsHershey'sThe backup growth engine - infrastructure is a good choice. ”

RMB also has depreciation space

In the second quarter of 2018, the RMB exchange rate is lower, and whether the RMB will “break 7” has become the most concerned topic in the current market.

According to Goldman Sachs, the exchange rate of the yuan against the US dollar in six months may reach 7.1. Although the short-term renminbi may continue to depreciate, in the long run, Deng Minqiang believes that the probability of a sharp depreciation of the renminbi is small.

In addition, he is optimistic that overseas assets will increase inflows in the future and allocate assets such as domestic bonds. Deng Minqiang believes that the current proportion of overseas central banks deploying Chinese bonds is only 1.1% on average, and the short-term allocation is not balanced, and the RMB will be added in the long run. Especially after the inclusion of the Bloomberg related index, the passive funds tracking the index will flow into the Chinese bond market, which is also an important step in the internationalization of the RMB.

Bloomberg announced in March this year that it plans to gradually incorporate renminbi-denominated Chinese government bonds and policy bank bonds into Bloomberg from April 2019.BarclaysThe global composite index, in addition to renminbi-denominated bonds, will also be included in the global government bond index and the emerging market local currency government bond index. Goldman Sachs expects that about $1 trillion of overseas funds will flow into the domestic bond market in the next four to five years after the Bloomberg Barclays Global Composite Index.

(Article source: First Finance)

                (Editor: DF134)

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