Deleveraging hurting China economy, Fed rate hike pause appropriate - Goldman Sachs

Omkar Godbole FXStreet Contributor

Credit deceleration (deleveraging) is the main factor responsible for the slowdown in China's economy, according to Goldman Sachs Chief Economist Jan Hatzius.

The Chinese economy expanded at an annualized rate of 6.4 percent in the fourth quarter, the weakest growth rate since early 2009, pushing the 2018 GDP to a 28-year low.

While most blame the anemic domestic demand and the trade war for Chinese slowdown, Goldman Sachs' Hatzuis believes the crackdown on excess leverage is primarily responsible for cooling economy.

Key quotes

Fed pause in rate hikes is appropriate.

Does not see a need for major changes in global forecasts.

Sees some stabilization in the second half of this year.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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