(Reuters) - China’s official economic growth rate is likely to slow further to 6.7 percent in 2016, and maintain a similar pace in the following two years, according to the most accurate forecasters of the country’s economy polled by Reuters last year.
A supply glut in sectors spanning raw materials to the property market will continue to erode growth in China, despite repeated calls from Beijing to combat overcapacity, said Zhang Yiping, a member of China Merchants Securities’ macroeconomic analysis team.
They topped a list of forecasters that were graded by StarMine for accuracy on a set of key monthly Chinese data releases in 2015.
“Unsold housing inventories as well as a massive campaign to reduce factory overcapacity has offset support from consumption,” Zhang told Reuters on behalf of the China Merchants team.
“In the next three years or so, we will see GDP growth of around 6.7 percent.”
China’s economy grew 6.8 percent in the fourth quarter of 2015 compared with a year earlier. For the whole of 2015, the economy expanded by 6.9 percent, a 25-year low, and roughly in line with the government’s target of around 7 percent.
The slowing momentum signals further challenges for policymakers to stimulate the economy using monetary tools.
The central bank has already cut interest rates six times since November 2014, and reduced the amount of cash that banks must hold as reserves to spur activity. In August 2015, China also devalued the yuan by 2 percent against the dollar.
China's currency CNY=CFXS will continue to face depreciation pressure this year, a result of both a sputtering economy and the central bank's foreign exchange reform plans, Zhang said.
Reporting by Beijing Newsroom Editing by Jeremy Gaunt