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December 18, 2014

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Home » Business » Finance

ADB cuts China’s 2014 and 2015 growth forecasts

By Wang Yanlin | December 18, 2014, Thursday | Print Edition

THE Asian Development Bank yesterday cut its 2014 and 2015 growth forecasts for China to 7.4 percent and 7.2 percent respectively.

The forecasts, cut from the 7.5 percent and 7.4 percent estimates made in September, were based on a continued real estate market correction in China and its spillover to related sectors like construction, according to the latest supplement to the bank’s Asian Development Outlook 2014 Update.

“The growth moderation in China is seen extending into the fourth quarter,” the report said. “The forecast is revised down to 7.4 percent for this year and 7.2 percent for 2015.”

China’s gross domestic product grew by the slowest pace in more than five years of 7.3 percent from a year earlier in the third quarter, led by corrections in the property sector, according to the National Bureau of Statistics.

In the first three quarters, the GDP grew by 7.4 percent in line with the ADB’s forecast and close to the government’s “around 7.5 percent” target.

But signs of further economic weakening in the world’s second-largest economy came from the latest activity data which showed that China’s manufacturing sector may see the worst performance in seven months in December.

The HSBC Flash China Manufacturing Purchasing Managers’ Index, the earliest available indicator of China’s industrial sector, fell to 49.5 in December, from November’s final reading of 50 — the first time in seven months the PMI has fallen.

China’s industrial production in November grew 7.2 percent, compared with the 7.7 percent rise in October. It was the second-lowest monthly reading since April 2009, with only August of this year recording a lower rate of 6.9 percent.

China’s policy-makers have made “growth stabilization” the top priority next year.

The ADB also projected that developing Asia, which excludes Japan, will grow 6.1 percent this year and 6.2 percent in 2015, down from previous estimates of 6.2 percent and 6.4 percent.

Finance


 

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