China’s economic growth is expected to further slide from a 13-year low as credit tightening and overcapacity continue to weigh on the world’s second largest economy.
China’s GDP growth is estimated at 7.5 percent in the second quarter, from 7.7 percent for the January-March period, according to analysts’ forecasts.
An economic slowdown may prompt the government to roll out more reforms after the Chinese economy last year expanded at the slowest pace since the Asian financial crisis in 1997.
“We maintain our Q2 GDP growth forecast of 7.5 percent, which is lower than the 7.7 percent in Q1,” said Barclays China economist Chang Jian on Monday.
Chang said the manufacturing PMIs confirmed a further slowdown in industrial activities. She forecast year-on-year industrial production growth to drop to 9 percent in June.
HSBC PMI readings indicated manufacturing, which accounts for 40 percent of China’s GDP, contracted in May and June.
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