Goldman Sachs(US:GS) Goldman Sachs·2025-04-21 05:09Investment Rating - The report indicates a forecasted augmented fiscal deficit for China at 14.5% of GDP by 2025, suggesting a need for aggressive fiscal easing to mitigate the impact of US tariff escalations [2]. Core Insights - Chinese policymakers are expected to implement significant fiscal easing measures to cushion the economic impact from external pressures, particularly from the US [2]. - The report highlights a downward revision in GDP growth forecasts for China and Mexico, reflecting broader economic challenges [9][93]. - The Current Activity Indicator (CAI) for China is reported at +4.7% for March, indicating a positive growth signal despite recent adjustments [12][49]. Summary by Sections Fiscal Policy Impacts - The fiscal policy impulse on China's real GDP growth is projected to be significant, with estimates indicating a notable effect on growth rates over the next few years [4][79]. - The report emphasizes the importance of fiscal multipliers in assessing the impact of budget deficits on economic growth [4]. Economic Indicators - The report provides a detailed analysis of various economic indicators, including the Financial Conditions Index (FCI) and Current Activity Indicators (CAI), which are crucial for understanding the economic landscape [6][46]. - The CAI for global markets shows a mixed performance, with developed markets at +0.9% and emerging markets at +3.7% for March [12][49]. GDP Forecast Adjustments - Significant changes in GDP forecasts have been noted across various regions, with a particular focus on the downward revisions for China and other major economies [93][94]. - The report outlines specific percentage point changes in GDP forecasts, indicating a more cautious outlook for several countries, including a notable decrease for China [93][94].