Roubini forecasts a swiftly slowing China

Advertisement

From Yahoo:

Roubini Global Economics, a leading provider of independent, global macroeconomic research, forecasts China’s 2016 GDP growth at 5.4%—well below the current Bloomberg consensus projection of 6.7%.

“Our recent trip to China underscored the myriad challenges facing the Chinese economy, which is now in the midst of a marked slowdown. Efforts to reorient the economy toward domestic consumption are not occurring quickly enough and President Xi Jinping’s stance on the reform question is a matter of considerable speculation,” said Chairman Nouriel Roubini. “The next few quarters will tell us whether he will commit to making serious changes or opt to maintain the status quo.”

Roubini, together with Don Hanna (Managing Director, Asia) and Daili Wang (Senior Economist), recently published a two-part report on the takeaways from the China trip, charting the trajectory of the economy’s deceleration and discussing the market implications of the slowdown. The authors cite lower investment, especially in residential construction, and weakening domestic demand as key headwinds in the coming years, with the resulting friction taking a toll on GDP growth, Chinese equities and commodity demand. In its latest China Outlook, the company downwardly revised its 2016 growth forecast for the economy from 5.6% to 5.4%.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.