The People's Bank of China has cut its key lending rates overnight, as analysts at Goldman Sachs become the latest to predict slower growth for the country.
The central bank lowered the one-year loan prime rate (LPR) by 10 basis points to 3.55%, while the five-year LPR was cut by the same margin to 4.2%.
Marking the first such reductions in 10 months, concerns about the property market meant the easing was not as large as expected.
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The monetary loosening is evidence Chinese authorities are trying to bolster a waning economic recovery that is losing momentum after the first quarter bounce from its post-Covid reopening.
Goldman Sachs has joined Bank America, JP Morgan and UBS in downgrading forecasts for the world's second largest economy.
Chinese gross domestic product is now expected to grow by 5.4% in 2023 and by 4.5% by 2024, according to Hui Shan, chief economist in China for Goldman Sachs. Her previous predictions were growth of 6% and 4.6%, respectively.
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Shan blamed China's struggling property market, which comprises the largest part of its economy, after figures showed the market weakened again in May, with new house sales at half the level of two years ago, and developers building 40% fewer homes.
"With no ‘easy fix' on the horizon, the property market's weakness and its negative impact on the rest of the economy is likely to persist," Shan said.
