Goldman Sachs sharply cut its outlook for economic growth in China

On Wednesday, Goldman Sachs lowered its forecast for China’s economic growth next year from 7.6% to 7.1%.

The research team of the bank refers to “the recently completed study of the potential growth of the economy and the difference in output between the Asian countries,” adding that the mentioned “reducing government targets for economic growth next year, which weakened the pressure on the introduction of more aggressive easing measures.”

However, the forecast for 2014 was kept unchanged at around 7.3%.

In the second quarter, China’s GDP gained 7.5%, compared with last year, surpassing expectations.
In the long term, Goldman Sachs argues that the potential growth of China’s economy will gradually slow down and be a little more than 7% over the next 5 years, and up to the end of 2017 the bank expects GDP to decline 6.7%.

Also been reduced and inflation forecast, promising growth in consumer prices by no more than 2% in the short term.

Despite this, the Chinese market continues to grow: in the morning session, consolidated the Shanghai Composite Index added 0.2%, while Hong Kong’s Hang Seng – 0.1%.