PIMCO Sees Weaker China GDP

PIMCO is cautious on China and sees GDP of 5.5%-6.5%, below the target of 6.5%.

• The economic challenges China faces have never been more pressing, and we think official GDP growth will likely range between 5.5% and 6.5% this year, versus the target of 6.5%.
• Although China’s currency policy could evolve in unexpected ways, we are expecting a gradual devaluation of the yuan this year.
• In Japan, we expect growth to remain flat and inflation to moderate, leading to easier monetary and expanded fiscal policy.
• Australia’s currency strength and lack of business spending are keeping prospects alive for more interest rate cuts.

Link to report

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