China: 2016 GDP forecast cut to 6.5% from 6.9% – CAN
By FXStreet FXStreet (Delhi) – Research Team at Commonwealth Bank of Australia has slashed its GDP forecast of China for 2016 to 6.5% from earlier estimated figure of 6.9% but has ruled out any chances of hard landing for the mainland.
Key Quotes
“We push back our forecast of economic recovery in China. While we keep our forecast of China’s official GDP growth in 2015 unchanged at 7%, we lower our 2016 GDP growth forecast to 6.5% from 6.9%.”
“The major drag on China’s economy is likely to remain the same: (i) decelerating growth in heavy industry (reflecting overcapacity), (ii) poor export growth (reflecting weak external demand and strong CNY exchange rate in trade weighted terms), and (iii) weak new housing construction (reflecting high inventories).”
“That said, the chance of a hard landing in China is also unlikely because a significant amount of policy stimulus is already in place with more to come.”
“There are tentative signs of improvement in new housing sales and credit growth in recent months. The number of fixed asset investment projects is also rebounding. In time, these positive changes will translate into more sustainable economic growth in China.”
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Source:: FX Street
