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.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.