Economists are forecasting that the People’s Bank of China is more likely to raise interest rates than cut them in the coming year, even as they slash growth projections for the world’s second-largest economy.
China’s industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed, underscoring challenges for a new leadership that wants to narrow the gap between rich and poor.
China’s official 7.8 percent economic growth for 2012 may have overstated expansion by twice the real rate, and is only now headed for a “legitimate” 8 percent gain, Eaton Corp. Chief Executive Officer Sandy Cutler said.
Li Wei, a Shanghai-based economist with Standard Chartered Plc comments on China’s central bank announcement today that it would cut banks’ reserve requirement ratio by 50 basis points. Li commented by e-mail.