Goldman Sachs upgraded its China growth forecast over the weekend, citing recent stimulus measures and new commentary from government officials that showed an openness to spend more aggressively to revive its economy.

The bank raised its full-year China GDP forecast to 4.9% from 4.7% and also upped its 2025 growth prediction to 4.7% from 4.3%. Beijing has previously said it's aiming for an annual growth target of "around 5%."

"The latest round of China stimulus clearly indicates that policymakers have made a turn on cyclical policy management and increased their focus on the economy," Goldman Sachs' chief China economist Hui Shan said in a note to clients published on Sunday.

On Saturday, China's finance ministry hinted at another large stimulus package to support the country's ailing property sector and suggested more government borrowing, although the ministry stopped short of unveiling the exact size or scale of spending.

"The central government has relatively large space for debt expansion and deficit increases," Finance Minister Lan Fo’an said at the much-anticipated briefing, describing the upcoming debt resolution plan as "the largest in recent years."

Although vague, the comments left the door open for a more aggressive fiscal package, which investors are increasingly betting on as Beijing attempts to pull itself out of a long slump spurred by deflationary pressures from a sluggish property market and weak domestic demand.

Optimism that the government will follow through boosted Chinese stocks on Monday with the Shanghai Composite (000888.SS), a key indicator of the overall performance of the Chinese stock market, rising more than 2%.

Similarly, China’s benchmark CSI 300 (000300.SS) finished the day up just under 2% to recover from last week's lows. The index is up 25% over the past month on the heels of China unleashing its most aggressive monetary stimulus since the pandemic.

The stimulus, first announced on Sept. 24, includes efforts like interest rate cuts, lower reserve requirements for banks, liquidity for the stock market, and mortgage relief, among other measures.

But the euphoria that initially fueled the rally in Chinese stocks has started to fade as economists wait for an additional package worth around 2 trillion yuan ($284 billion).

At Saturday's briefing, Lan said there "are other policy tools that are being discussed that are still in the pipeline."

He also noted more measures would be implemented to speed up the introduction of current proposals after China's top economic planner, the National Development and Reform Commission, announced it would issue 200 billion yuan ($28 billion) to local governments for spending and investment projects by year's end.