BofA lowers their growth projections on China
- 2021 growth seen at 8.0% (previously 8.3%)
- 2022 growth seen at 5.3% (previously 6.2%)
- 2023 growth seen at 5.8% (previously 6.0%)
Adding that the recent slowdown in the Chinese economy has been broad-based across domestic demand due to the latest delta variant outbreak, tight credit controls, and de-carbonisation policies which are cutting into commodity production.
The firm also states that the lack of a major policy response so far means that the cooling in growth has been more pronounced than forecast, but they do anticipate that the government should step in with support in Q4 this year.
"Easing measures would likely include, but are not limited to, infrastructure funding support, mortgage loan relaxation, interest rate/reserve requirement ratio cuts, and relaxation in commodity supply reduction for decarbonization goals."
The "sacrificing" of growth is pretty much something that Adam has been talking about since the start of the month here, as China turns their focus on 'common prosperity'.