Analysts revise down Chinese growth forecasts

Following confirmation of a slowdown in Chinese growth last night, Nomura downgraded the country’s 2014 growth outlook to 6.9 per cent from 7.5 per cent, as covered in this morning’s roundup.

Now, a number of other high profile analysts have revised their forecasts. Societe Generale economist Michala Marcussen said the bank expects Chinese growth to slow to six per cent in five year’s time, and as low as four to five per cent by the end of the current decade. Its full year estimate for 2014 was held at just over seven per cent.

And chief economist at JP Morgan Haibin Zhu, who previously forecast of a slight acceleration in growth, now thinks China’s economy will decelerate in the near-term. He forecasts 7.4 per cent growth in 2013 (revised down from 7.6 per cent), followed by 7.2 per cent in 2014 (down from 7.7 per cent). Zhu said a less effective credit channel, slower credit growth, and the negative effect of a strong Chinese yen on exports would contribute to the slowdown.

Sebastien Galy of Societe Generale says that with US Treasuries stabilising and some fairly good data coming from the US, Chinese factors will take on a greater importance in determining the direction of the markets.