Deutsche Bank Forecasts 8.6 Percent Chinese Growth in 2014

Markets are underestimating China’s 2014 growth potential, say analysts at Deutsche Bank, whose forecast is far above consensus expectations.
Most analysts expect the world’s second-largest economy to expand at a rate of 7.5 percent in 2014, but Deutsche Bank sees much stronger growth at 8.6 percent.

When jokingly asked by CNBC’s anchors what the analysts were smoking at Deutsche Bank, because their forecast is so far above consensus, Taimur Baig, chief economist for Asia at Deutsche Bank replied: “We’re smoking reality.”

“Of course, China is slowing, given adverse demographics and the ongoing shift from manufacturing to services, we all know that story. And of course we fully understand the drag coming from the financial sector,” said Baig.

“Our point is, on a cyclical basis, the market is underestimating the bounce that China will get in 2014,” he added.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza