Global economy not at risk of recession despite China weakness: Goldman

By: |
Singapore | Updated: August 25, 2015 9:19 AM

The global economy is not at a risk of a recession in spite of recent concerns over China's economy and weakness in commodity prices, Goldman Sachs said, although it lowered its short-term outlook for global stock markets.

Goldman SachsThe global economy is not at a risk of a recession in spite of recent concerns over China’s economy and weakness in commodity prices, Goldman Sachs said, although it lowered its short-term outlook for global stock markets. (Reuters)

The global economy is not at a risk of a recession in spite of recent concerns over China’s economy and weakness in commodity prices, Goldman Sachs said, although it lowered its short-term outlook for global stock markets.

“The drop in commodity prices during the past year and recent economic and foreign exchange weakness in China and other emerging markets will not tip the global economy into recession,” analysts at the U.S. investment bank said in an Aug. 24 dated note to clients, which was seen by Reuters.

The Wall Street bank reduced its short-term outlook for the equity market to “neutral”, but remained “overweight” over six and 12 months. It also maintained its view that commodities will underperform.

“We see a meaningful risk that markets are over-interpreting the collapse of oil and commodity prices as a negative growth signal,” the analysts said. The fall in prices of oil and other commodities are primarily a reflection of excess supply rather than weak demand, they said.

Goldman Sachs raised its short-term outlook for U.S. equities to neutral and lowered European equities to neutral.

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Rising fuel prices- Small is big: How the ‘Chhotu’ LPG cylinder became a bestseller
2WTO defers ministers’ meet
3Govt plans further cut in compliance burden: Piyush Goyal