Tuesday, May 15, 2012

Nomura's Zhang: China GDP Growth Could Fall Below 8% Without Fiscal Stimulus (Video)

Source: Haldini / flickr
After foreign direct investment (FDI) in China fell by 0.7% in April (-27.9% from the European Union), the sixth monthly decline in a row, Zhiwei Zhang, Nomura's Chief China Economist, told Bloomberg TV that the downside risk to economic growth in China is "becoming higher", and GDP growth could fall below 8% if the Chinese government doesn't boost infrastructure spending. He also said the PBOC (People's Bank of China) could lower lending rates further, but believes fiscal policy would be more effective than monetary policy at this point.

Yesterday the PBOC lowered the reserve requirement ratio (RRR) for banks by 50 basis points.


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