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China growth to slow says economists

The major investment banks are forecasting a significant slowdown in China's growth in 2012.

Comments from Japan's Nomura International predict China's economic growth is likely to slip to 7.9 percent in 2012, from a previous estimate of 8.6%, and is among one of several gloomy predictions from major economic forecasters.

Although most of the major investment banks have cut their economic growth expectations for one of the leading drivers of the world economy this year, Nomura is the first to predict growth below eight percent. In addition, investment bank JP Morgan Chase could not see any reduction immediate reduction in interest rates to help stimulate growth, while an economist at the People's Bank of China stated that the country is moving from high-speed expansion to a lower level, single-digit growth economy.

Although more bullish in its growth forecast, at 8.4%, a report from bankers Morgan Stanley highlights three main reasons for the slowdown: weakness in the domestic housing market; the constraint in policy easing and the reduction of net exports from China.  In 2012, according to the report, the economy will mainly be driven by domestic consumption.

Tags: China, Corporate News, Forecasts

Published 3rd January, 2012

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