Bulgaria's Economic Outlook Dimmed as EBRD Lowers Growth Projections
The European Bank for Reconstruction and Development (EBRD) has revised its growth forecast for Bulgaria's economy for the upcoming two years
Economists have lowered their expectations for China's full-year GDP growth following the release of disappointing economic data over the weekend, NBC reports. Eswar Prasad, a professor of international trade and economics at Cornell University, highlighted that Beijing's outlook for the second half of the year is now "flashing red, or pretty close to red."
Prasad noted that both long-term issues, such as property prices, and short-term challenges, including weak domestic demand, private investment, and household consumption, have contributed to the bleak economic outlook. He added that recent data continues a negative trend observed over the past few months.
Duncan Wrigley, chief strategist at Everbright Securities International, pointed out that while China's housing downturn has been severe, the country has so far avoided a systemic financial crisis, unlike other major downturns seen globally. He described the ongoing situation as a "slow, painful, grinding adjustment" for China's economy.
Data released on Saturday revealed that key indicators like retail sales, industrial production, and urban investment all grew slower than expected in August, missing economists' forecasts. The urban jobless rate reached a six-month high, and year-on-year home prices fell at their fastest rate in nine years. These figures are the latest in a series of economic disappointments as China's recovery from the Covid-19 pandemic has struggled to gain momentum.
Prasad criticized the Chinese government's slow response in implementing bold measures to stimulate the economy, suggesting that more decisive action on monetary policy is needed. Helen Qiao, chief Greater China economist at Bank of America, added that although economic deceleration calls for easing, China's central bank may not cut rates as aggressively as the US Federal Reserve, which is expected to lower rates later this week.
Qiao emphasized that weak job security and income growth are dampening consumer spending in China. Bank of America has revised its forecast for China's 2024 GDP growth to 4.8%, below the government's 5% target, while Citigroup adjusted its projection to 4.7%.
Prasad also noted that China's production sector, which had been relatively resilient until recently, is now showing signs of weakening. While he stopped short of declaring the economy in severe distress, he cautioned that conditions are deteriorating.
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