Banks Are Trimming China Growth Expectations Left And Right

china tent

It looks like the banks have all come around to a China slowdown, Shanghai Daily reports.

Here’s the breakdown:

  • UBS downgraded China’s GDP growth from 9.3% to 9% for this year, and from 9% to 8.3% for next year. It reasoned that the slowdown would occur because exports would fall in Q4.
  • Deutsche Bank cut its outlook for this year from 9.1% to 8.9% and next years from 8.6% to 8.3%.
  • Morgan Stanley cut its 2012 growth from 9% to 8.7%.

UBS also cut inflation expectations for next year from 4% to 3.5%, arguing that the government would likely raise interest rates when necessary.

Still, Beijing is worried enough about inflation to acknowledge that it’s likely to persist, for an uncertain amount of time.

In a meeting of the National Development and Reform Commission, Chairman Zhang Ping presented a report on economic and social expectations and policies for the first 7 months of next year. He cited a laundry list of reasons for continued inflation — Eurozone and U.S. debt, the cost of oil, natural disasters, production costs and more — but provided no solution or policy to curb inflation going forward.