Bears are back as China GDP tipped to slide closer to 7pc
Experts who previously thought sub-8pc growth rates were unthinkable for China are now forecasting figures close to 7pc – the level at which a hard landing looms large.
Experts who previously thought sub-eight per cent growth rates were unthinkable are now falling over themselves to issue forecasts for China that are edging perilously close to seven per cent – the level at which a hard landing supposedly starts becoming probable rather than possible.
China issues third quarter gross domestic product (GDP) figures on Thursday, and the numbers are expected to reflect the impact of the protracted euro zone sovereign debt crisis and a faltering economic recovery in the United States.
People’s Bank of China Deputy Governor Yi Gang said last week in Tokyo that China’s economy would probably grow by 7.8 per cent this year, and economists queried it.
“This is a view that I find too optimistic,” said Mizuho Securities chief economist Shen Jianguang. “Given the government’s policies implemented so far, I believe this will be a challenge.”
In recent weeks both the World Bank and the Asian Development Bank (ADB) have both cut full-year growth forecasts for China.
The World Bank cut its full-year forecast to 7.7 per cent from 8.2 per cent, and pruned its next year forecast to 8.1 per cent from 8.6 per cent previously.