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<ul class="summary-list"><li>Goldman Sachs analysts upgraded their growth forecast for China from 4.7% to 4.9% for this year.</li><li>Recent comments from officials suggest a higher debt ceiling and more construction starts by the end of the year.</li></ul>China may not fall too short of its growth targets this year after all, Goldman Sachs analysts said. The analysts upgraded their 2024 forecast for China's GDP from 4.7% to 4.9% after officials in Beijing pledged a new round of stimulus measures. That's just shy of Beijing's goal of 5% economic growth. "The latest round of China stimulus clearly indicates that policymakers have made a turn on cyclical policy management and increased their focus on the economy," the analysts said in a Sunday note.They said their upgrade was largely based on promises of greater public spending from the Ministry of Finance at a highly-anticipated press conference on Saturday.Officials said that 2.3 trillion yuan ($15.4 billion) of local government special bond funds will be used in the fourth quarter of this year, suggesting a higher government debt ceiling, or "the largest in recent years."The analysts said that the announcement indicates "a more back-loaded fiscal impulse and a larger rebound in growth from Q3 to Q4 than we previously anticipated."The analysts from Goldman also pointed to fuel for near-term construction starts.Last week, China's top economic planning agency, the National Development and Reform Commission, said it would pre-approve 200 billion Chinese yuan ($28.2 billion) of next year's projects by the end of October, presumably to begin construction before the end of the year.They said that effort could help the country's GDP growth get closer to the "around 5%" target for 2024, which <a target="_blank" class="" href="https://www.businessinsider.com/china-growth-targets-axa-investment-property-sector-industrial-production-2024-9">looked increasingly unlikely</a> for most of this year. The analysts also upgraded their growth forecast for next year, from 4.3% to 4.7%. They say that while China's struggling property market will continue to weigh on the economy and as export volume slows from its massive growth this year, the step-up in the latest stimulus is still more policy easing than they had originally accounted for.The analysts add that while they upgraded forecasts for the near term, they still see major structural headwinds <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-growth-stimulus-demand-emerging-markets-world-bank-2024-10#:~:text=China's%20officials%20previously%20said%20the,goal%20is%20out%20of%20reach.">in the long-term</a>."While we have upgraded our cyclical view on the back of the more forceful and coordinated China stimulus, our structural view on China's growth has not changed," the analysts said."The '3D' challenges - deteriorating demographics, a multi-year debt deleveraging trend, and the global supply chain de-risking push are unlikely to be reversed by the latest round of policy easing," they added.China's recent stimulus pushes have aimed to prop up its weak economy, which has been plagued by a <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/chinese-property-stocks-homebuying-restrictions-stimulus-shanghai-gdp-2024-9?_gl=1*l9qswn*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyODkxOTI0NC4yNjMuMS4xNzI4OTE5Mzg3LjU1LjAuMA..">struggling property sector</a> and <a target="_blank" class="" href="https://www.businessinsider.com/pets-sports-disney-linabell-china-consumer-economy-demand-spending-property-2024-9">weak domestic demand</a>.

Goldman Sachs raises China growth outlook on optimism over Beijing's fresh push to revive struggling economy

<ul class="summary-list"><li>Nouriel Roubini says stagflation risk will rise if Donald Trump wins the election.</li><li>The famed "Dr. Doom" economist made the remarks at the Greenwich Economic Forum on Wednesday.</li></ul>The US economy might confront a fate more challenging than a recession if Donald Trump retakes the White House, famed economist Nouriel Roubini said."The combination of trade, currency, monetary, fiscal, immigration and foreign policy of Trump poses much higher risks of stagflationary outcomes than if Kamala Harris is elected," he said at the Greenwich Economic Forum on Wednesday, first reported by <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-10-09/-dr-doom-nouriel-roubini-warns-of-trump-win-spurring-stagflation-shock">Bloomberg</a>.The famously bearish forecaster is referring to the one scenario central banks hope to avoid at whatever cost. Stagflation occurs when inflation keeps rising but growth slows.There are no painless solutions for an economy that tumbles into this situation.Typically, central banks lower interest rates to revive weaker activity, but this option goes away if prices keep rising. Rates must stay high to reduce inflation, leaving authorities between a rock and a hard place.When stagflation last hit the US in the 1970s, a <a target="_blank" href="https://www.businessinsider.com/stagflation-recession-us-economy-outlook-gdp-dimon-inflation-rate-cuts-2024-4">deep recession was required to finally break out</a> of the crisis.According to Roubini, Trump's proposals would fuel these two key ingredients: lower growth and higher inflation.For instance, <a target="_blank" href="https://www.businessinsider.com/trump-tariff-plan-inflation-policy-impact-trade-war-china-rates-2024-5">scores of economists</a> have criticized the former president's pledge to introduce a 10% universal tariff on all US imports. Not only are duties past down to consumers, but these taxes cause producers to pull out their products. When this happens, supply falls and prices rise.Trump's idea to replace the US income tax with tariffs was similarly called out by former Treasury Secretary Larry Summers, who called it the "<a target="_blank" href="https://www.businessinsider.com/trump-tariff-income-tax-proposal-stagflation-yellen-summers-trade-war-2024-6">mother of all stagflations</a>."When it comes to currency policy, Barclays highlighted that Trump's plans to devalue the US dollar <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/trump-tariff-trade-barrier-proposals-us-dollar-devaluation-currency-dominance-2024-7">would likewise spark higher inflation</a>.Roubini also expressed concern about Trump's stringent immigration policies. If elected, the Republican candidate has vowed to enforce mass deportations, which threatens one of the economy's major engines of growth, Roubini said.Others have made the same point. In July, JPMorgan's chief global strategist David Kelly called Trump's tariff and immigration policy mix an <a target="_blank" href="https://www.businessinsider.com/stagflation-recession-trump-policy-tariff-immigration-deportation-economy-outlook-jpmorgan-2024-7">"elixir for stagflation."</a> Separately, the Peterson Institute think tank warned that removing migrant workers would <a target="_blank" href="https://www.businessinsider.com/trump-deportation-immigration-plan-impact-recession-risk-inflation-stagflation-labor-2024-6">trigger a labor supply crunch</a> and a manufacturing-based recession.Roubini said tensions in the Middle East make the threat of stagflation under Trump worse. As conflict escalates between Israel and Iran, rising oil prices increase price pressure. By one estimate, a worst-case scenario in the region could push international crude up to<a target="_blank" href="https://markets.businessinsider.com/news/commodities/oil-price-outlook-israel-iran-geopolitics-middle-east-war-crude-2024-10?_gl=1*1dmubht*_ga*MTMxNDIwNDI1Ni4xNjc1Njg3OTU4*_ga_E21CV80ZCZ*MTcyODQ5NTIxOC43MDguMS4xNzI4NDk5OTY5LjYwLjAuMA.."> $200 a barrel</a>.He recommended that investors buy gold, short-term duration bonds, and Treasury inflation-protected securities to hedge against any upcoming risk.To be sure, not all of Roubini's forecasts have panned out. After correctly predicting the 2008 housing crash, his pessimistic outlooks have earned him the moniker of "Dr. Doom."According to Bloomberg, he similarly warned of a stagflationary debt crisis in 2022, citing that it would be worse than the 1970s era.

A Trump victory raises the risk of a US economic situation worse than recession, 'Dr. Doom' Nouriel Roubini says

<ul class="summary-list"><li>Belinda Román teaches economics at a little-known university in San Antonio, Texas.</li><li>She nailed her forecasts for 2023, at a time when much of Wall Street was predicting a recession.</li></ul>At the start of 2023, most US economists were bracing for a recession.They predicted a combination of red-hot inflation and sky-high interest rates would stifle growth and drive up unemployment.An economics professor at St Mary’s University, a tiny Roman Catholic college in San Antonio, Texas, bucked the trend. Last January, Belinda Román told surveyors from <a target="_blank" href="https://www.wsj.com/economy/the-college-professor-who-got-a-weird-year-for-the-economy-right-5ee09449">The Wall Street Journal</a> that she was expecting the economy to have a strong 2023. <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-ai-inflation-federal-reserve-rally-bull-market-2023-12">She ended up nailing that call</a>.Román spoke to Business Insider about why she was more bullish on the American economy than most of Wall Street’s top banks — and shared her predictions for 2024.<h2>No recession, low unemployment</h2>In January 2023, Román locked in her forecast for the year, telling the WSJ that she was expecting the US’s Gross Domestic Product (GDP) to expand by 2.8%.That was a significantly higher number than what most of the nation’s economists were predicting. Both <a target="_blank" href="https://fortune.com/2023/12/18/bank-of-america-soft-landing-no-recession-new-economic-forecast/">Bank of America</a> and <a target="_blank" href="https://www.reuters.com/markets/us/jpmorgan-raises-us-economic-growth-estimate-no-longer-expects-2023-recession-2023-08-04/">JPMorgan</a> had warned it was time to brace for a recession — typically defined as two successive quarters of economic contraction — while even some of Wall Street’s most optimistic voices were still forecasting a slowdown.Román has been proven right since then. The Commerce Department estimates that <a target="_blank" href="https://www.businessinsider.com/economy-us-gdp-inflation-federal-reserve-economic-growth-canada-germany-2024-1">GDP rose 3.1%</a> last year, thanks to <a target="_blank" href="https://www.businessinsider.com/inflation-up-how-consumer-price-index-looked-december-2024-1">cooling inflation</a> and resilient consumer spending. That's been demonstrated by Americans’ willingness to spend big on travel, live sports, and <a target="_blank" href="https://www.businessinsider.com/taylor-swift-eras-tour-super-bowl-kansas-city-chiefs-bofa-2024-2">Taylor Swift concerts</a>.“I went back and looked at what I saw historically was typical for the US economy when it’s coming out of a shock, and tried to recalibrate my thinking,” Román, who’s taught at St Mary’s for the past 13 years, told BI in a recent interview.“Covid-19 was significant, but it wasn’t as long term in duration as some of the other events that we’ve been through, so that’s how I started to adjust my numbers,” she added.“I didn’t really go back and tinker with my forecast — I just kept going, based on what I thought was going to be the outcome.”Román also nailed her start-of-2023 inflation, unemployment, and interest rate predictions. That meant she ended up topping the Journal’s <a target="_blank" href="https://www.wsj.com/economy/the-college-professor-who-got-a-weird-year-for-the-economy-right-5ee09449">ranking of 71 forecasters</a> for last year, finishing ahead of well-known economists including <a target="_blank" href="https://www.businessinsider.com/stock-market-outlook-disinflation-federal-reserve-rate-cuts-goldman-sachs-2023-12">Goldman Sachs’ Jan Hatzius</a>.She told BI that her long and varied path into teaching — starting out as a pre-med student before stints in the House of Representatives and at the American Chamber of Commerce in London — had helped her to look at the US economy in a different light.“I didn’t come back to academia until I’d finished all my private sector and NGO sector work, so I brought that experience with me, and I think that helps when I’m doing these types of forecasts,” Román said.<h2>2024 predictions</h2>Many forecasters are now bullish on the US economy off the back of a stellar 2023 — and Román is no exception.She told BI she’s expecting growth to dip slightly, to around 2.6%, but remain well clear of a level where Americans have to start worrying about a potential recession.“There’s still growth, and there’s still some positive momentum, but there’s also a sense of softening,” Román said. The <a target="_blank" href="https://www.businessinsider.com/jobs-labor-market-unemployment-rate-wage-growth-january-economy-2024-2">labor market</a> has carried on going from strength to strength in recent months, but <a target="_blank" href="https://www.businessinsider.com/inflation-cpi-consumer-price-index-january-housing-food-energy-prices-2024-2">inflation</a> has remained stubbornly above the Federal Reserve’s 2% target, and some on Wall Street are warning that <a target="_blank" href="https://markets.businessinsider.com/news/stocks/gundlach-doubleline-spx-stock-market-outlook-recession-economy-unemployment-layoffs-2024-1">growth could finally start slowing</a> this year.The 2024 presidential election in November is one potential speed bump that makes it harder to call which direction the economy will go this year, Román added.“The political environment is a challenge because it’s very charged with a lot of rhetoric,” she told BI.“I very much think from the ground up — if whichever way the presidential coattails swing brings in significant changes at the lower levels, then we might see a significant change in economic activity.”

This college professor turned out to be an economic oracle last year. Here's her outlook for 2024.

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Goldman Sachs raises China growth outlook on optimism over Beijing's fresh push to revive struggling economy

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A Trump victory raises the risk of a US economic situation worse than recession, 'Dr. Doom' Nouriel Roubini says

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This college professor turned out to be an economic oracle last year. Here's her outlook for 2024.

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