7 Feb 2014
Flash: Tightening liquidity in China to slow down GDP in H1 - Nomura
FXStreet (Bali) - According to Nomura Economists in China, tightening liquidity conditions will most likely lead to slower growth in H1.
Key Quotes
"Tight liquidity has pushed up financing costs, leading to a shorter new credit maturity structure, imposing additional financial risks. We believe this trend is set to continue through H1 2014."
"We illustrate how rising interest rates will slow growth by discouraging investment and crowding out private investment."
"We maintain over view that GDP growth will slow to 7.5% in Q1 and 7.1% in Q2, despite favourable base effects."
"We believe the government will have to loosen monetary policy by mid-2014 if it is to achieve its reported 7.5% growth target."
Key Quotes
"Tight liquidity has pushed up financing costs, leading to a shorter new credit maturity structure, imposing additional financial risks. We believe this trend is set to continue through H1 2014."
"We illustrate how rising interest rates will slow growth by discouraging investment and crowding out private investment."
"We maintain over view that GDP growth will slow to 7.5% in Q1 and 7.1% in Q2, despite favourable base effects."
"We believe the government will have to loosen monetary policy by mid-2014 if it is to achieve its reported 7.5% growth target."