The World Bank’s predictions on China’s growth have been reversed along with warnings of possible slower and a stable growth rate is approaching over the coming months.
The World Bank has changed their forecast of China’s growth of 8.4 percent growth, down to 7.7 percent in 2013. The world’s second-largest economy ,have reduced as policymakers and looking to re-balance the growth level ,according to world bank.
The fall in the demand of the Chinese exports, have raise concerns from US and Europe as to if China could maintain its high growth rate. Especially due to the fact China has relied on exports and investments to improve the economy over the past years.
The bank said that the stimulus measures of infrastructure projects would assist in increasing China’s growth level, according to reports released last December. The reports were released after Beijing approved $150bn worth of infrastructure projects.
However, according to the latest reports released, concerns have been raised regarding China’s investments growth level.
“The main risk related to China remains the possibility that high investment rates prove unsustainable, provoking a disorderly unwinding and sharp economic slowdown,” it stated in the report.
The report continuous stating “should investments prove unprofitable, the servicing of existing loans could become problematic – potentially sparking a sharp uptick in non-performing loans that could require state intervention.”
The World Bank said the global growth is still low in high income countries, especially in Europe.
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