HSBC: China’s Top Five Macro Themes for 2015

With disappointing economic data chasing China into the new year, HSBC is cutting its growth forecasts, citing five key themes for the economy.  The first trend — disinflationary pressure — is driving the forecast cuts, HSBC said.

“Inflation has been decelerating sharply since late 2011, with all measures now at a multi-year low,” it said in a note Tuesday, citing the consumer price index’s decline from an average 4 percent in 2010-11 to 1.4 percent last month as well as a 33-month long contraction in the producer price index. “This disinflation, which is not new, is mostly a reflection of weak demand.”

Forecasting continued disinflation into 2015, HSBC cut its 2015 gross domestic product (GDP) growth forecast to 7.3 percent from 7.7 percent and lowered its 2016 view to 7.4 percent from 7.6 percent.


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