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Major banks cutting their China growth forecasts

On Monday, China released its quarterly growth numbers. Many major investment banks decided to cut their economic forecasts for this year, warning that property market depreciation and unexpected power cuts might affect the growth.

CNBC tracked China’s full-year GDP measures from 14 central banks. This year, the halfway prediction is the growth of around 8.4%, following the latest cuts. That marks down 0.4% points from the previous forecast.

Forecasts

From the companies CNBC tracked, Nomura, a Japanese investment bank, has the lowest forecast this year for China at around 7.8%. While DBS, Southeast Asia’s largest bank, holds the highest at approximately 8.9%.

Here are forecasts for the entire year:

Banks cutting China’s GDP forecast

August

ANZ: Cut to 8.4%, from 8.9%Morgan Stanley: Cut to 7.8%, from 8.3%

September

Bank of America: Cut to 9%, from 9.3%Citi: Cut to 8.3%, from 8.8%Deutsche Bank: Cut to 8.3%, from 8.8%Goldman Sachs: Cut to 7.8%, from 8.3%HSBC: Cut to 8.4%, from 8.6%Nomura: Cut to 7.8%, from 8.3%

October

Standard Chartered: Cut to 8.3%, from 8.9%JPMorgan: Cut to 8.4% from 8.8%

Banks that didn’t change China forecast

Credit Suisse: 8.3%.DBS: 8.9%.UBS: 8.3%.

China’s economic scene

Adverse circumstances for growth ascended this year, varying from disruptive floods to slower-than-expected customer spending. Adding to the uncertainty is China’s regulatory crackdown, including indebted Evergrande and other real estate developers and internet tech giants` monopolistic behavior.

Besides all the pessimistic forecasts, effective export growth continues to be an optimistic point. China’s economic development and the expansion rate are still on point to exceed the global growth prediction from the IMF of around 5.8%.

According to analysts, China is taking the chance to make unpleasant but important economic adjustments this year.

However, the official GDP target of over 7% is way lower than investment banks expect this year.

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