(Photo : Goldman Sachs Tower)

Due to signs that pointed to stabilization in the world's second largest economy, Goldman Sachs has raised its China gross domestic products (GDP) forecast from 7.4 per cent to 7.6 per cent for this year.

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Goldman Sachs, an American global investment banking giant, said its economists have changed its China growth forecast after the National Bureau of Statistics announced that the country's purchasing managers indexes (PMI) for last month hit 51, up from 5.3 in July.

According to the bank, growth in China appears to have accelerated during the third quarter of this year. There were also signs that external demand has picked up coupled with supportive government policies. However, Goldman said its 2014 GDP forecasts remains at 7.7 per cent.

Investors Welcome Growth Forecast

Goldman Sachs is a reputable multinational investment banking firm that offers global investment banking, investment managements, and other financial services for institutional clients. The upgrading of its China GDP growth forecasts was immediately welcomed by investors in the world's second largest economy.

The latest PMI data released recently also triggered belief that China's economy is poised to make a full recovery before the end of this year. Aside from Goldman Sachs, Credit Suisse Group, Deutsche Bank, and JPMorgan Chase & Co have also upgraded their GDP growth projections for China.

China To Achieve Growth Goal This Year

Recently, Chinese Premier Li Keqiang, who spoke during the opening of the 10 China-Association of Southeast Asian Nations Expo in Nanning, said he is confident that China will achieve its economic goals this year as more and more signs have pointed to economic growth. China aims to hit 7.5 per cent growth rate for the entire 2013.

Li, said the country has conditions that will make it meet major economic and social development tasks this year.  He said the Chinese economy has been maintaining a stable development since the first half of the year and investors, analysts, and financial institutions have expressed increasing confidence.