BEIJING May 24 Goldman Sachs has trimmed its
economic growth forecasts for China to 9.4 percent this year,
from 10 percent previously, citing a recent run of surprisingly
weak data, high oil prices and supply constraints.
"The growth slowdown has been even sharper than we forecast,
especially evident in April industrial production," Goldman said
in a research note to clients.
"In addition, inflation is not coming down as rapidly as we
hoped," the U.S. bank said. It predicts China's annual inflation
will peak at 5.6 percent in June, with average annual inflation
hitting 4.7 percent in 2011.
If China's inflation does indeed hit 5.6 percent in June, it
would be the highest since July 2008, when inflation ran at 6.3
For 2012, Goldman reduced its economic growth forecasts for
China to 9.2 percent, from the initial 9.5 percent.
Goldman said it expects China to keep its monetary policy
tight until the third quarter of this year, even though growth
seems to be "clearly below trend".
Speculation that China's economy, the world's second
biggest, could be breaking sharply has gained traction after its
April factory output disappointed some investors by growing 13.4
percent, compared with forecasts for 14.7 percent.
But not all economists think the data suggests an acute
slowdown is at hand.
HSBC, for instance, noted that even though April's
industrial output was softer than expected, it is still a solid
growth pace of over 13 percent, and does not point to a "hard
landing" in the economy.
(Reporting by Koh Gui Qing; Editing by Ken Wills)