What's going on?

Two of the world�s most influential investment banks downgraded their growth forecasts for China on Monday � and you-know-what was largely to blame.

What does this mean?

America�s Goldman Sachs and JPMorgan Chase lowered their economic expectations for China across both the current quarter and the whole of 2021, following a similar move by Japanese rival Nomura last week. All three banks believe that recent measures to contain the rapidly spreading Delta variant of coronavirus will curb consumer spending � the largest component of China�s economy.

Goldman now predicts the Chinese economy will grow 8.3% this year compared to 2020, rather than 8.6%. JPMorgan expects 8.9% annual growth � also slightly lower than its previous figure of 9.1%. But Nomura thinks the impact will be more significant: it cut its forecast all the way from 8.9% to 8.2%. Still, at least China should still be on track to meet its official economic growth target of over 6%…

Why should I care?

For markets: Holding out for a hero.
It�s not all doom and gloom: China�s central bank is now expected to step in with yet more economy-boosting support. Lower interest rates and/or another cut to the amount of cash local Chinese banks have to keep in reserve should help encourage lending and spending. They could also bolster the country�s stock market, which has suffered recently from intensifying government crackdowns in several sectors.

Zooming out: Do do drugs.
Monday also brought good news in the planet�s ongoing push against the pandemic. German drugmaker BioNTech � pharmaceutical giant Pfizer�s partner in developing one of the world�s most widely used coronavirus vaccines � announced that it had now signed contracts to deliver some 2.2 billion doses of the vaccine this year, as well as over a billion more in 2022. The company accordingly increased its forecast for vaccine-related revenue in 2021 by almost 30%.