China seen heading for sub-6% economic growth as tariffs soar

Economists are downgrading their forecasts for economic growth in China to below 6%, a level seen as necessary for the Communist Party to meet its own goals in time for its centenary in 2021, said Bloomberg. Oxford Economics, Bank of America Merrill Lynch, and Bloomberg Economics on Tuesday all cut their forecasts for gross domestic product growth in 2020 to below 6% as a result of increasing risks from the tariff war with the US. UBS Group AG also cut their estimate on Tuesday, although they’ve been estimating
sub-6% expansion since mid-August. In addition, Bank of America’s Helen Qiao and others are warning that the government’s current approach to stimulus is proving insufficient. China is refraining from cutting benchmark policy rates or pumping large volumes of cash into the economy even as growth slows to the weakest in almost three decades and the tariff escalation in August adds further headwinds.