BEIJING (Reuters) - UBS on Monday lowered its forecast for China’s gross domestic product growth in 2009 to 8.0 percent from 8.8 percent, citing a much weaker global growth outlook and forecasts of a deeper and longer U.S. recession.
It is the second time in less than three months that UBS has lowered its forecast for Chinese GDP growth next year.
The bank’s China economist, Tao Wang, also lowered her forecast for GDP growth this year to 9.6 percent from 10 percent.
“We expect growth of exports and real estate investments to slow significantly in the coming months, but think that the government’s counter-cyclical fiscal and monetary policy measures could help stimulate domestic demand and partially offset the negative external shock,” Wang said in a report.
Wang added that she expected annual consumer inflation to drop to 4 percent by the end of the year and to average 2.6 percent in 2009.
Inflation eased to 4.9 percent in August from a decade-high 8.7 percent in February and is expected to cool further, giving policy makers more leeway to support growth.
The revision is the first to be issued since a Reuters poll on Chinese growth conducted in late September. The median forecast of economists was for the economy to grow 9.9 percent this year, slowing to 9.0 percent in 2009.
UBS on Sunday lowered its forecast for global growth to 2.2 percent from 2.8 percent.
Reporting by Jason Subler; Editing by Nick Macfie