HONG KONG (XFN-ASIA) - Barclays Capital said it expects China s gross domestic product (GDP) growth to decelerate significantly to 8.8 pct this year from 11.4 pct achieved in 2007.
The UK house said the slowdown will be driven by a combination of external and domestic factors, including a weakening of global demand and tightening monetary and credit environment.
Administrative measures taken by Chinese authorities to curb growth and moderate inflation would also contribute to the slowdown, it said.
"Policymakers will maintain their anti-inflation stance through mid-year, but in the second half, with inflationary pressures easing and the slowdown apparent, we expect authorities to switch to a pro-growth strategy," it said.
Barclays said it believes Beijing will lift recently implemented price controls, ease liquidity conditions and cut lending and deposit rates in two 27-basis point rate cuts.
it said it expects the yuan to appreciate by about 7 pct this year.
jun.concepcion@xfn.com
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