US bank lowers growth view
By Wang Yanlin |
May 25, 2011, Wednesday
|
Print Edition
Print Edition
GOLDMAN Sachs Group Inc lowered its forecast for China's economic growth amid slower industrial production and weaker retail sales expansion in the world's second-largest economy.
China's gross domestic product may expand 9.4 percent on an annual basis this year and 9.2 percent in 2012, less than a previous estimate of 10 percent and 9.5 percent respectively, Goldman Sachs analysts Yu Song and Helen Qiao said in a note yesterday.
The United States investment bank also revised upward its forecast for China's inflation this year to 4.7 percent from a previous 4.3 percent. It left its 2012 forecast unchanged at 3 percent.
"This is both a sharper and more extended slowdown than we had previously anticipated," said the bank in a note. It cited the impact of higher oil prices and supply-side constraints that may curb the economy's growth momentum.
A 20 percent rise in the price of oil shaves 15 basis points to 20 basis points off China's GDP.
Also the country's retail sales, a sector expected to spur growth, has been performing below expectations, it said.
Credit Suisse Group, JPMorgan Chase & Co and Daiwa Securities Group have also shed their estimates, earlier media reports said.
Goldman Sachs' revised estimates were made a day after a survey showed China's manufacturing growth may moderate to a 10-month low in May.
The HSBC Flash China Manufacturing Producer Managers' Index stood at 51.1 in May, the bank said on Monday. It fell from April's final data of 51.8 and indicated easing industrial activities in the country.
China's GDP expanded 9.7 percent annually in the first quarter, trailing last year's 10.3 percent and 9.8 percent in the final quarter of 2010.
The Consumer Price Index, the main gauge of inflation, rose 5.3 percent from a year earlier in April, close to a 32-month high of 5.4 percent in March.
The World Bank last month raised its forecast for China's 2011 GDP growth rate to 9.3 percent from 9 percent previously.
China's gross domestic product may expand 9.4 percent on an annual basis this year and 9.2 percent in 2012, less than a previous estimate of 10 percent and 9.5 percent respectively, Goldman Sachs analysts Yu Song and Helen Qiao said in a note yesterday.
The United States investment bank also revised upward its forecast for China's inflation this year to 4.7 percent from a previous 4.3 percent. It left its 2012 forecast unchanged at 3 percent.
"This is both a sharper and more extended slowdown than we had previously anticipated," said the bank in a note. It cited the impact of higher oil prices and supply-side constraints that may curb the economy's growth momentum.
A 20 percent rise in the price of oil shaves 15 basis points to 20 basis points off China's GDP.
Also the country's retail sales, a sector expected to spur growth, has been performing below expectations, it said.
Credit Suisse Group, JPMorgan Chase & Co and Daiwa Securities Group have also shed their estimates, earlier media reports said.
Goldman Sachs' revised estimates were made a day after a survey showed China's manufacturing growth may moderate to a 10-month low in May.
The HSBC Flash China Manufacturing Producer Managers' Index stood at 51.1 in May, the bank said on Monday. It fell from April's final data of 51.8 and indicated easing industrial activities in the country.
China's GDP expanded 9.7 percent annually in the first quarter, trailing last year's 10.3 percent and 9.8 percent in the final quarter of 2010.
The Consumer Price Index, the main gauge of inflation, rose 5.3 percent from a year earlier in April, close to a 32-month high of 5.4 percent in March.
The World Bank last month raised its forecast for China's 2011 GDP growth rate to 9.3 percent from 9 percent previously.
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