GOLDMAN Sachs has cut its growth forecast for China for 2013 and 2014, citing soft cyclical signals and a recent tightening of financial conditions.
The bank said that it expects GDP growth to be at 7.4 per cent and 7.7 per cent year-on-year for 2013 and 2014 respectively, down from its forecast of 7.8 per cent and 8.4 per cent.
Goldman is not the only bank to revise its outlook on Chinese growth. Nomura recently predicted that GDP growth may fall below seven per cent in the second half of this year.
The Shanghai stock exchange composite index was down 5.3 per cent this morning.