HSBC cut its growth forecasts for China

PanARMENIAN.Net - HSBC on Wednesday, June 19 cut its growth forecasts for China, citing faster reform moves that could hurt growth, along with weaker-than-expected data flows, according to MarketWatch.

Qu Hongbin, chief economist for China at HSBC, said their 2013 and 2014 gross domestic product views now stand at 7.4%, versus prior forecasts of 8.2% and 8.4%, respectively.

Consensus is calling for China growth of 7.8% in 2013, he noted. Sub-8% growth will likely add to disinflationary pressures on the country, said Hongbin, who also lowered the consumer price inflation view to 2.5% year-on-year from 3.1% and the 2014 CPI view to 2.6% from 2.7%.

Hongbin said it will take time for new measures from China to "filter through to the economy and have an impact on growth. In the short term some reform initiatives will actually be negative for demand, implying that growth will slow before regaining momentum in 2015."

Growth should rebound in 2015, HSBC noted.