Forecasts of China’s Economic Growth and Consumer Inflation for 2015 revised down
Owing to increased downward pressure on economic growth, economists at China's central bank have reduced their growth and consumer inflation forecast for 2015.
On Tuesday, the report was posted on the central bank's website. Economists at the People's Bank of China (PBOC) said that they have lowered the forecast despite their predictions that Chinese home prices and foreign demand will strengthen.
These factors will boost China's economy in next six months. "We estimate that our country's gross domestic product growth in the second-half of the year will be higher than in the first-half", affirmed the economists.
The economists' initial forecast was 2.2%, but they slashed it to 1.4%. The report also unveiled that the nation's economy will expand 7%. Earlier predictions were of 7.1%.
The report makers said that growth in industrial production, exports, investment in property and manufacturing have all remained below level. The report led by Ma Jun, chief economist of the PBOC, also stated that consumer inflation will be affected by long-term industrial deflation.
There is a mixed response in the market. Some banks have become conscious with regard to extending credit. On the other hand, some companies are not at all interesting in investing. Also, the demand for loans is weak, said the researchers.
In the first quarter, China's economy increased at 7.0%, considered to be the slowest in six years. The nation's consumer-price index rose 1.2% in May from a year earlier.