Goldman Sachs lower its forecast for Australia’s economic growth in 2025 on Trump vs China

Goldman Sachs lowered its forecast for Australia’s economic growth in 2025 (info comes via Bloomberg (gated)):

• forecasts Australian domestic product (GDP) rising 1.8% in 2025, down from its previous forecast of 2%

GS cite likely “negative spillovers” from the incoming Trump’s expected increase in tariffs on China, specifically the impact on Australia’s exports to China. Trump has promised 60% tariffs on exports from China

GS’ Reserve Bank of Australia outlook:

• forecasts a 25bp interest rate cut from the Bank in February 2025
• terminal rate of 3.25% by November 2025
• “higher US tariffs on China as having a dovish read-through for Australian rates”
• GS express wariness over further fiscal stimulus in Australia ahead of the 2025 federal election, warn of upside risks to rates

This article was written by Eamonn Sheridan at www.forexlive.com.