The Man Who Invented The BRICs warned last week of a slowdown in China.
In an interview today he elaborates, saying growth could fall to 8%. He told Economic Times:
“It is my judgement that the Chinese economy is probably slowing down more than people realise. And I suspect that China is going to slow down to around 8 pct GDP growth. If I’m right, that means sometime in the 2nd half this year, Chinese inflation will not be a problem, and will come back down to around 4 per cent. And the PBOC will be able to stop tightening monetary policy and we can all live happily ever after.”
Because China is the biggest consumer of many commodities, this slowdown has and will bring carnage to commodity markets.
“It’s not surprising at all that commodities prices are coming under pressure. The surprise is that they rose so much earlier in the year.”
Finally O’Neill shared his new favourite BRIC:
“I get an email every day on how I should drop Russia from the BRICs. And it’s like a reverse indicator. Russia is cheap. Tactically, I find Russia to be the most interesting of the growth markets.”
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