Slowdown in China is the biggest global risk for 2016, according to the Economist Intelligence Unit

Lauren Fedor
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The Shanghai Composite Index Rises 2.52%
The EIU said volatility in Chinese equity markets underlined structural concerns about the country's economy (Source: Getty)

Leading experts have warned that a persistent slowdown in Chinese growth is the biggest threat to the global economic outlook.

Analysts at the Economist Intelligence Unit (EU) said in a new report out today that the Chinese economy is facing “formidable challenges”, citing volatility in the domestic equity markets, slipping export figures and lower capital outflows.

But the EIU said that while China’s growth could slow to 4.9 per cent by the end of the decade, it nevertheless expects China to overtake the United States by 2026 in nominal GDP terms to become the world’s largest economy.

The EIU also said it expects oil prices to stay low, if not fall further, in 2016.

“OPEC's decision to prioritise maintaining its market share over lifting the global price means that a supply glut will keep a firm lid on prices,” said EIU global analyst Mike Jakeman.

“We do not expect to see price rise at all in 2016,” he added. “The market will only begin to tighten in 2017, reflecting a fall in output from US shale producers.”

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