BEIJING: Goldman Sachs has trimmed its economic growth forecasts for China to 9.4 per cent this year, from 10 per cent 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 US bank said. It predicts China's annual inflation will peak at 5.6 per cent in June, with average annual inflation hitting 4.7 per cent in 2011.
If China's inflation does indeed hit 5.6 per cent in June, it would be the highest since July 2008, when inflation ran at 6.3 per cent.
For 2012, Goldman reduced its economic growth forecasts for China to 9.2 per cent, from the initial 9.5 per cent.
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 per cent, compared with forecasts for 14.7 per cent.
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 per cent, and does not point to a "hard landing" in the economy.
"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 US bank said. It predicts China's annual inflation will peak at 5.6 per cent in June, with average annual inflation hitting 4.7 per cent in 2011.
If China's inflation does indeed hit 5.6 per cent in June, it would be the highest since July 2008, when inflation ran at 6.3 per cent.
For 2012, Goldman reduced its economic growth forecasts for China to 9.2 per cent, from the initial 9.5 per cent.
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 per cent, compared with forecasts for 14.7 per cent.
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 per cent, and does not point to a "hard landing" in the economy.
