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Here’s how much 10 big banks have cut their China growth forecasts

Ahead of China’s quarterly growth numbers due out on Monday, most major investment banks have trimmed their economic predictions for the year and warned that abrupt power cuts and a property market slump may drag down growth.

CNBC tracked estimates for China’s full-year GDP from 13 major banks, 10 of which have cut their forecasts since August. The median prediction is growth of 8.2% this year, following the latest cuts. That’s down 0.3 percentage points from the prior median forecast.

Of the firms CNBC tracked, Japanese investment bank Nomura has the lowest full-year forecast for China at 7.7%. Southeast Asia’s largest bank, DBS, has the highest at 8.8%.

Here are banks’ forecasts for the full year:

Banks that cut China’s GDP forecast
August

  • ANZ: Cut to 8.3%, from 8.8%
  • Morgan Stanley: Cut to 7.9%, from 8.2%

September

  • Bank of America: Cut to 8%, from 8.3%
  • Citi: Cut to 8.2%, from 8.7%
  • Deutsche Bank: Cut to 8.4%, from 8.9%
  • Goldman Sachs: Cut to 7.8%, from 8.2%
  • HSBC: Cut to 8.3%, from 8.5%
  • Nomura: Cut to 7.7%, from 8.2%

October

  • Standard Chartered: Cut to 8.2%, from 8.8%
  • JPMorgan: Cut to 8.3% from 8.7%

Banks that didn’t change China forecast

  • Credit Suisse: 8.2%.
  • DBS: 8.8%.
  • UBS: 8.2%.

China’s economic landscape

Negative factors for growth have mounted this year, ranging from slower-than-expected consumer spending to disruptive floods. Adding to uncertainty is Beijing’s wide-ranging regulatory crackdown, including on indebted real estate developers and allegedly monopolistic behavior by internet tech giants.

Strong export growth remains a bright spot. China’s economic expansion is still on pace to exceed the IMF’s global growth prediction of 5.9%.

Analysts have said China is taking the opportunity this year to make painful but necessary adjustments to the economy. The official GDP target of more than 6% this year is far lower than what investment banks are betting.
Source: CNBC

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