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Goldman Sachs economists and experts share insights on macro trends shaping the global economy. Learn More
Allison Nathan of Goldman Sachs Research dives into macro developments that are top of mind for investors, executives and policymakers. Learn More
Goldman Sachs Research analysts explore the progress, economics, and implications of DLE being implemented at scale, with increasing relevance in the context of Chile's recent National Lithium Policy.
In this report, Goldman Sachs Research analysts break down changes to the Taskforce on Nature-Related Financial Disclosures (TNFD) framework and the new metric disclosure recommendations, discuss data availability and potential implications for corporate reporting, and highlight takeaways on how this development may influence the regulatory environment and investing in Biodiversity moving forward.
In this report, Goldman Sachs research analysts identify eight targets included in the final agreement from COP 15 that they think could have the most impact driving the global conversation around nature restoration and conservation moving forward.
On January 16th Goldman Sachs Research held its 31st annual Global Strategy Conference in London, which was attended by over 400 clients in person, for the ﬁrst time since the pandemic.
Just as commodity markets have been dominated by the dollar in 2022, Goldman Sachs Commodities analysts expect them to be shaped by underinvestment in 2023.
Two decades since Goldman Sachs Research first set out long-term growth projections for the BRICs economies, GS Research economists update and expand those projections to cover 104 countries out to 2075 and identify four major themes for the global economy.
The key macroeconomic question of the year has been whether inflationary overheating can be reversed without a recession. Analysis from Goldman Sachs Research economists suggests that the answer is yes—an extended period of below-potential growth can gradually reverse labor market overheating and bring down wage growth and ultimately inflation, providing a feasible if challenging path to a soft landing.
While our Goldman Sachs Research economists expect Japan’s real GDP growth to slow to 1.3% in 2023, from 1.5% in 2022, they look for growth to continue to outpace its potential. Consumption is likely to directly benefit from economic reopening, and they also expect capex to remain firm on the back of pent-up demand, labor shortages due both to demographics and reopening, and supply chain rebuilding.
Economic growth is likely to start 2023 on the weak side across most of the Asia-Pacific, according to Goldman Sachs Research economists, as a fading reopening boost, slowing global manufacturing cycle, and past monetary tightening weigh on activity. As these headwinds fade and China’s reopening gets underway, they expect growth to reaccelerate. While most of our economists’ GDP forecasts are a little below consensus for 2023 as a whole, they are more positive on second-half growth, particularly in China.
After a very challenging 2022, Goldman Sachs Research economists expect China GDP growth to accelerate from 3.0% this year to 4.5% next year on the back of China’s potential exit from its zero-Covid policy, which they assume will start shortly after the “Two Sessions” in March. China’s reopening would imply a strong consumption rebound, firming core inflation, and gradually normalizing cyclical policies in 2023.
Goldmans Sachs Research economists maintain their long-held view that the energy crisis will push the European economy into recession this winter, as surveys and production data point to a sizeable slowing in energy-intensive industries, and high inflation will reduce real household incomes. But they now see a shallower recession as the hard data have remained surprisingly resilient, the rebalancing of the gas market has reduced the risk of energy rationing and governments have provided significant fiscal support.
GS SUSTAIN: ESG of the Future–Accelerating the Energy Transition: Metrics and Tools to Measure Progress
As Sustainability investing matures to the “Measurement” phase of its cycle and becomes more forward-looking, there is rising focus on how to quantify impact — whether environmental or social.
Global growth slowed through 2022 on a diminishing reopening boost, fiscal and monetary tightening, China’s Covid restrictions and property slump, and the Russia-Ukraine war. Goldman Sachs Research analysts expect global growth of just 1.8% in 2023, as US resilience contrasts with a European recession and a bumpy reopening in China.
GS SUSTAIN: Green Capex - Accelerating the Energy Transition - Stimulating Capital and Return on Capital
In this report, Goldman Sachs Research highlights where capital is needed, what investors are rewarding and strategies/vehicles to stimulate investment with a case study on China decarbonization strategies. To stimulate greater capital towards the Energy Transition and broader sustainable development goals, GS Research analysts believe stakeholders such as investors, managements and policymakers should deploy the three Cs: collaboration, comprehensive focus, and corporate returns clarity.
GS SUSTAIN: Green Capex - US Inflation Reduction Act - What's Transformational, What's Supportive, What's Underappreciated
The Inflation Reduction Act (IRA) — signed into law by President Biden on August 16 — provides about $386 billion in energy and climate spending over 10 years, with related tax incentives up about $265 billion from the prior run rate. With annual investment needed globally this decade to be on path for Net Zero by 2050 +$1.8 trillion vs. the annual run rate in 2016-20, the IRA is helpful but not an immediate panacea to put the world on track. Goldman Sachs Research Analysts see the IRA as a catalyst to accelerate investment in longer-term carbon capture utilization and storage projects. GS Research Analysts also see the IRA as supportive for solar, electric vehicles, residential clean energy and nuclear energy.
Goldman Sachs Research analysts update their Carbonomics cost curve and arrive at three key conclusions. Overall, ‘the revenge of the old carbon economy’ keeps driving a disjointed de-carbonization process that is both inflationary and inefficient. However, GS Research analysts see some clean tech green shoots, with clean hydrogen at the cusp of a regulatory and economic breakthrough.
GS Sustain: SFDR Updates - Latest Flows, Guidance, Views, and a Framework for Sustainable Investments
Given nearly all assets are moving towards Article 8 and 9 funds in Europe, Goldman Sachs Research analysts see an overly strict interpretation of SFDR risks exacerbating a 'Divestment Dilemma.' SFDR continues to drive flows and the transition of non-ESG funds towards ESG (Article 8 and 9) funds as managers find it increasingly difficult to market Article 6 (non-ESG) funds in Europe. Contrary to headlines highlighting trends in downgrades of funds from Article 9 to 8, GS Research analysts see more upgrades from Article 8 to 9 funds vs. their prior assessment. Goldman Sachs Research shares its latest views and interpretations of SFDR and establish a framework for 'Sustainable Investments.'
Biodiversity is the cornerstone around which most sustainability objectives sit and an area to which we think corporates and investors will likely pay increased attention in order to meet sustainability goals. In this report, Goldman Sachs Research analysts review the three catalysts they believe are needed to potentially increase investment in biodiversity over time.
In this report, Goldman Sachs Research analysts address the most recent commonly asked questions: (i) Has music streaming penetration peaked? (ii) How is music spend affected by a macro downturn? (iii) How to size the monetization opportunity from emerging platforms? and (iv) What is the outlook for catalogue spend?
Immersive short-form video (SFV) has become the largest single time spent format in the China internet space. Goldman Sachs Research introduces its bear/base/bull case at 21%/25%/30% by 2025E, after assessing penetration potential from the lens of categories/users/merchants/facilitators.
Goldman Sachs Research expects the next bull market to be 'Fatter & Flatter' than the last. In this report, analysts describe and analyze the trigger points around market transition markers in an attempt to understand the likely path following the powerful equity rally since June.
Goldman Sachs Research analysts believe that the Energy Crisis, in particular affordability, has reached a tipping point that likely requires significant policy intervention. At current forward prices Goldman Sachs Research analysts estimate that energy bills will peak early next year at c.€500/month for a typical European family, implying a c.200% increase vs. 2021.
Goldman Sachs Research analysts see fibre and 5G as critical technologies necessary to reducing the Information and Communications Technology (ICT) sector's overall carbon footprint and enabling low-carbon technologies across the broader economy.
The US economy has about a one in three chance of slipping into recession by the middle of 2023, according to Goldman Sachs Research economists. They believe that any post-Covid US recession would likely be mild, with a limited increase in the unemployment rate of around 1 percentage point. This would be unprecedented in postwar US history, though recessions with similarly limited increases have occurred in other G10 economies, such as Germany and Canada.
As food supply faces increasing challenges due to cyclical and disruptive factors, and structurally heightened risks from climate change, Goldman Sachs Research analysts view agriculture efficiency as an essential part of the long-term solution for food security. And for China, much can be done in revolutionizing the efficiency as smarter agriculture thrives.
Can Europe strengthen its energy independence in the face of the Russia-Ukraine crisis without compromising its climate change goals? Goldman Sachs Research uses its Carbonomics framework to model the evolution of Europe’s energy system towards a lower cost, lower imports, lower carbon system.
The outlook for increased Silicon Carbide (SiC) uptake as a more efficient alternative to silicon that can save costs and improve performance, especially in automotive applications, has accelerated over the past half year. Goldman Sachs Research analysts now expect an inflection point for rapid market growth potentially two years sooner than projected.
Goldman Sachs Research analysts estimate that the risk of the economy entering a recession in the next year is 30% in the US, 40% in the Euro area, and 45% in the UK. In this report, they revisit key facts about the frequency and severity of recessions by analyzing 77 recessions in advanced economies since 1961.
Green Capex will be the dominant driver of global infrastructure over the next decade and will be critical for achieving Net Zero, Infrastructure and Clean Water goals. In this report, Goldman Sachs Research analysts explore rising capex and R&D expectations, and consider government commitments to increase or stimulate Green Capex.
While the increase in US nonfarm payrolls in May beat expectations, the unemployment rate has been flat for three months to early June, job openings have started to decline and the official JOLTS series dropped sharply in April. For these reasons, Goldman Sachs Research sees the US economy on a narrow path to a soft landing.
Goldman Sachs Research analysts argue that the battery metals bull market has peaked. With climate change being top of mind, investors are fully aware that battery metals will play a crucial role in the 21st century global economy, just as bulk and base metals did before them.
Goldman Sachs Research is introducing a new framework for generalists and ESG investors, the GS SUSTAIN Supply Chain Mosaic, to plug gaps in a patchy data landscape for measuring supply chain risks and to assess business resilience. The collaborative framework blends data on supply chain location and concentration with GS SUSTAIN proprietary scoring of suppliers’ ESG engagement and sovereign ESG risk.
GS Research analysts examine the major drop in cryptocurrency prices and how digital asset markets have been dominated by volatility in stablecoins (cryptocurrencies intended to be pegged 1:1 with fiat currencies, most commonly the US Dollar). While these assets are fairly new, many of the economic issues affecting stablecoins will be familiar to FX market participants and other investors.
Goldman Sachs Research expects increased focus on corporate emissions of greenhouse gases as ESG markets become more forward-looking and in response to both rising regulations including proposals from the SEC and carbon pricing considerations.
The need to move towards a Circular Economy – one in which consumption of ecological resources is equal to or less than what the planet can regenerate – has been discussed for years but not sufficiently deployed. However, we see three catalysts that can push forward deployment of Circular Economy solutions, which, based on a World Economic Forum study, could potentially unlock $1 tn of annual materials savings.
Nickel now sits at the intersection of Europe’s push for decarbonisation and energy independence. With Europe’s domestic EV sector already favouring nickel-based batteries, nickel is set to benefit the most from politically motivated demand accelerating already rapid growth in nickel battery use.
At the heart of the coming surge in green aluminium demand lies a paradox: aluminium is a key input required to produce decarbonising technologies like EV’s and solar power, yet its own production is very carbon intensive, generating 2% of all global emissions. This paradox begs the question: how can we secure enough aluminium to effectively decarbonise, while keeping the climate impact of the path to net zero to a minimum?
The critical role copper will play in achieving the Paris climate goals cannot be overstated. As the most cost-effective conductive material, copper sits at the heart of capturing, storing and transporting these new sources of energy.
Goldman Sachs Research reviews the key economic trends shaping the Asian American experience in the US, the barriers they face to advancement in the workplace and representation in top leadership positions, and the contributions they’ve made to innovation and GDP growth.
The GS SUSTAIN team believes that 2022 will be a watershed year for ESG-related capital markets regulation in the US. The climate disclosure rule proposal from the SEC on 21 March 2022 opens the door for the broadest federally mandated corporate ESG data disclosure requirement ever in the US.
One year after the launch of the first stage of the European Sustainable Finance Disclosure Regulation (SFDR), SFDR funds are growing significantly compared to non-ESG counterparts. The GS SUSTAIN team has reviewed the implications of the SFDR regulation and disclosure requirements. Their analysis of the various approaches taken across asset managers concludes that not all Article 8 or 9 funds are created equal, in a good way.
The Russia-Ukraine conflict is a turning point for the energy sector, according to analysis from Goldman Sachs Research. One that is similar to, and potentially greater than, the Fukushima nuclear accident and Libyan civil war concurrence in 2011. In this report, analysts examine this Return of Energy Capex and draw five key conclusions.
Ever-increasing demand, component shortages and rising raw material prices are now challenging the long-standing consensus that battery prices will continue to decline in the coming decade. To assess the impact of this “Greenflation” and potential supply chain bottlenecks ahead, Goldman Sachs Research introduces a proprietary battery pack price and cost curve model, supply-demand models across battery components and a bear case battery TAM scenario.
In this report, the seventh installment of our Electric Vehicles: What’s Next series, analysts from Goldman Sachs Research outline their new forecast for a slower pace of decline for automotive battery prices through 2025, and they consider the outlook for the EV and automotive battery markets under three scenarios (bear, base, and hyper-adoption).
Escalating military conflict in Ukraine and the growing realization that imposed sanctions could meaningfully and sustainably reduce Russian exports, even with carve-outs for energy trade, has resulted in oil prices surging to their highest level since 2008. Given Russia’s key role in global energy supply, the global economy could soon be faced with one of the largest energy supply shocks ever. Goldman Sachs Research builds three scenarios in an attempt to provide an estimate of where oil prices are heading.
The invasion of Ukraine and the escalating sanctions on Russia continue to be the dominant driver of markets. Before the start of military action, Goldman Sachs Research estimated how much geopolitical risk premium was priced into a range of global assets and estimated how those assets might move in the case of either a full de-escalation or a version of a scenario where risks flared into outright conflict.
The increased need for greater transparency and tightened definitions for sustainable investment products is accelerating ESG regulation throughout the Asia Pacific region. These companion reports from the Goldman Sachs Research GS SUSTAIN team explore the material ESG regulations emerging across the region and highlight the connection between regulation and expanding green valuation premia.
The UK performs poorly on international comparisons for both social mobility and inequality. According to surveys, covid is increasing inequality further, and recent rises in inflation, especially energy costs, are intensifying the problem. But, corporate managements are starting to focus on social issues (encouraged by the flows into ESG funds). Goldman Sachs Research has started to see investment intentions pick up in survey data and the potential to bring back supply locally or make supply chains more resilient may also increase employment opportunities in the UK.
At a time when some investors are questioning the investability of Chinese assets due to significant regulation and growth concerns, Goldman Sachs Research believes China A shares, a US$14tn asset class, have become more investable given the ongoing liberalization and reform measures in the Chinese capital markets.
Korea: What if? Strong Upside from Potential MSCI DM Reclassification and Narrowing of Valuation Discount
Korea’s potential reclassification as a developed market is gaining traction. The Finance Minister and Korea Exchange Chairman have publicly advocated changes that specifically address impediments to MSCI upgrading Korea to developed market (DM) status. Also, there appears to be broad political consensus for the upgrade initiative given the election platforms of the major presidential candidates.
Following the strong CPI print on February 10th, Goldman Sachs Research is raising their Fed forecast to include seven consecutive 25bp rate hikes at each of the remaining FOMC meetings in 2022 (vs. five hikes in 2022 previously). They continue to expect the FOMC to hike three more times at a gradual once-per-quarter pace in 2023Q1-Q3 and to reach the same terminal rate of 2.5-2.75%, but earlier.
The EU Taxonomy is ramping up to become the “common green standard” used to credentialize companies’ green revenue and capex as well as investors’ green investments. With the initial climate phase having taken effect, Goldman Sachs Research sees 2022 becoming a critical period of experimentation and engagement between investors and corporates around disclosures and alignment-estimation models leading up to full Taxonomy application from January 1, 2023.
While previous Goldman Sachs Research has focused on the 2050 net zero end game, here they explore a more immediate, more tangible topic; one that is poised to revolutionize European economies and our everyday lives: the urgency of electrification.
Will Congress pass any reconciliation package this year? Will Democrats maintain control of Congress after the November midterm elections? Goldman Sachs Research’s economists offer insight into these questions and more.
Although the renewed surge in Covid infections is likely to weigh on services activity over the winter, Goldman Sachs Research expects a more manageable hit to European economic activity than last year.
The European Commission has released plans to include some natural gas and nuclear energy power plants as ‘green’ under the existing EU Taxonomy’s Climate Change Mitigation objective. We believe this would help provide some guarantee to Europe’s volatile energy supply as renewables scale and help ensure a smoother transition to a low carbon economy.
Chief Economist Jan Hatzius discusses the Omicron variant's effect on the economic outlook for 2022, and how persistent inflationary pressures could modify the Fed’s schedule for hikes and balance sheet normalization.
In this report, Goldman Sachs Research examines how the gaming/media landscape has already shown some key elements as to how the Metaverse might evolve and how themes such as decentralized web activity and virtual experiences could become hallmarks of many of the next wave of computing in Web 3.0.
Recent years have seen a surge in investing with social and environmental impact in mind, including across emerging markets. One aspect of social impact investing concerns the role of women in the economy – or Womenomics. To assess how investing based on Womenomics can impact investment returns, Goldman Sachs Research constructed a Womenomics Index across emerging markets sovereign debt based on five factors: education, labour, agency, women in power and health.
In this report Goldman Sachs Research examines how capital markets' deep engagement in sustainability is driving de-carbonization through a divergence in the cost of capital of high carbon vs. low carbon investments.
Carbonomics: Taking the Temperature of European Corporates - An Implied Temperature Rise (ITR) Toolkit
In this report Goldman Sachs Research leverages their Carbonomics Net Zero Paths to gauge the implied temperature rise of corporate de-carbonization through the lenses of >110 corporates in the 15 most carbon intensive sectors of the European market.
With a strengthening debate among investors for splitting an emerging market (EM) mandate into China and EM ex-China strategies, given China’s significant market size, its rising dominance in the EM benchmark and idiosyncratic factors such as geopolitics and regulatory policy that could affect its performance, Goldman Sachs Research discusses the implications for investors and portfolio allocations.
Goldman Sachs Research believes Green Capex will be the dominant driver of global infrastructure over the next decade, with $6 trillion of investment needed annually to decarbonize the world, address water needs and shore up transportation and other critical systems.
The number of “unicorns” has surged in India in recent years, enabled by the rise of the internet ecosystem, availability of private capital and a favorable regulatory environment. Goldman Sachs Research expects the IPO pipeline to remain robust over the next 12-24 months, with market cap increasing from US$3.5tn currently to over US$5tn by 2024, making India the 5th largest market by capitalization.
COP26 is a historical opportunity to accelerate the de-carbonization pledges laid out by COP21 (the Paris Agreement) in 2015. In this report Goldman Sachs Research analyzes five key themes of change they believe can drive progress.
Goldman Sachs Research presents modelling for two paths to net zero carbon, with two global models of de-carbonization by sector and technology, leveraging the team’s proprietary Carbonomics cost curve.
Following a year of delay, the Euro 2020 will finally go ahead on June 11. As the excitement for the tournament builds, Goldman Sachs Research constructs a statistical model to simulate the European Cup, which we intend to update as the tournament progresses.
Goldman Sachs research has shown that one of the fastest ways to accelerate change and effectively begin to address the racial wealth gap is to listen to and invest in Black women. Our Black Womenomics research focuses on the wealth gap, its relationship with these economic disadvantages, and the public and private investment opportunities to help close these gaps.
China’s pledge to achieve net zero carbon by 2060 represents two-thirds of the c.48% of global emissions from countries that have pledged net zero, and could transform China's economy, starting with the 14th Five-Year Plan.
Goldman Sachs Research hosted its first Carbonomics conference in London on November 12, focused on the de-carbonization trends and technologies currently transforming all major industries. The virtual conference convened approximately 5,000 investors, company managers, regulators and industry experts, with speakers and panelists including 30 CEOs of leading corporates and key policymakers.
Measuring the Reopening of America: Range of Recovery Paths Widen for Different Categories, Remain a ‘4’
In week 25 of the Measuring the Reopening of America series, several back-to-normal categories that had improved over the past few weeks reversed trends, including lodging and dining, while stay-at-home vertical growth largely decelerated. Net, our composite score remains the same as last week as the pace of reopening continues to fluctuate across different categories but the overall trend fails to show progress for essentially the third month.
Net zero is becoming more affordable as technological and financial innovation, supported by policy, are flattening the de-carbonization cost curve. Goldman Sachs Research updates its 2019 Carbonomics cost curve to reflect innovation across c.100 different technologies to de-carbonize power, mobility, buildings, agriculture and industry, and draw three key conclusions.
In Europe there are some tantalising signs of progress on women’s contribution to the economy: most notably, participation rates for women in the workforce have risen dramatically and continue to move up. In many European countries they are now above rates in the US.
Since Goldman Sachs Research's report A Revolution Rising - From low chatter to loud roar (April 2018), a virtuous cycle of ESG adoption has continued, driven by consumers, employees, regulators, corporates, NGOs and investors, leading to ESG strategy becoming a critical component of corporate & investor conversations. This report revisits our analysis using earnings transcript analysis tools to track the development of ESG themes over the past 5 years among global corporates in the S&P 500, STOXX 600 and ASX 200.
Green hydrogen looks poised to become a once-in-a-generation opportunity: Goldman Sachs Research estimates it could give rise to a €10 trillion addressable market globally by 2050 for the Utilities industry alone.
Following our first 6 weeks in the series, GS Research continues to monitor the reopening of America, as cities and states across the U.S. begin to reopen at different paces and with different processes in place.
Clean hydrogen has a major role to play in the path towards net zero carbon, providing de-carbonization solutions in the most challenging parts of the Carbonomics cost curve - including long-haul transport, steel, chemicals, heating and long-term power storage.
Environmental, social and governance (“ESG”) investing is at a deep level all about sustainability, yet we rarely ask the question, “How sustainable is ESG investing itself?” Here, we seek to provide a clearer sense of where ESG investing fits in the broader scope of active asset management, examine the gaps it fills and use that assessment to better structure the ESG investing processes, assess its place in asset allocation and rethink the metrics we apply to it.
Clean tech has a major role to play in the upcoming economic recovery. Leveraging our Carbonomics cost curve, we estimate that clean tech has the potential to drive US$1-2 tn pa of green infrastructure investments and create 15-20 mn jobs worldwide, through public-private collaboration.
Following our first five weeks in the series, GS Research continues to monitor the reopening of America, as cities and states across the U.S. begin to reopen at different paces and with different processes in place.
Following our first four weeks in the series, GS Research continues to monitor the reopening of America, as cities and states across the U.S. begin to reopen at different paces and with different processes in place.
Goldman Sachs Research explores topics and questions related to COVID-19 and provides a framework for the post-COVID-19 investing environment across three phases (preservation, consolidation and innovation) that capture the structural dynamics of the competitive environment.
Following our first three weeks in the series, GS Research continues to monitor the reopening of America, as cities and states across the U.S. begin to reopen at different paces and with different processes in place.
Following our first two weeks in the series, GS Research continues to monitor the reopening of America, as cities and states across the U.S. begin to reopen at different paces and with different processes in place.
With cities and states across the US beginning to reopen, Goldman Sachs Research has introduced a new weekly tracker to help gauge progress in a wide range of consumer and business segments.
With cities and states across the US beginning to reopen, Goldman Sachs Research has introduced a new weekly tracker to help gauge progress in a wide range of consumer and business segments.
Climate change is re-shaping the energy industry through technological innovation and capital markets’ pressure.
The latest gender pay gap analysis from the Global Markets Institute reveals that the unexplainable share of the wage gap has increased — a sign there’s more work to be done. Read Report
Cities will be on the frontlines of climate adaptation. Building up their resilience has the potential to drive one of the largest infrastructure build-outs in history and will likely require innovative sources of financing. Read Report