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China central bank reiterates economic forecasts

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Staff writer ▼ | June 8, 2016
China's central bank reiterated its forecast for economic growth of 6.8% this year but cut its estimate on exports.
Bank of China
Economy in Asia   Bank of China slashed its forecast for exports
In its mid-year work report, the People's Bank of China slashed its forecast for exports to a 1% drop from a previous expectation for 3.1% growth.

China's trade shrank 8% last year, compared with the government's target for 6%, the worst performance since the global financial crisis. However, the central bank sees domestic recovery remaining on track.

The PBoC upgraded its forecast for fixed-asset investment growth to 11%, up 0.2 percentage points from estimates made late last year.

It also expects consumer price inflation to rise 2.4% this year, 0.7 percentage points higher than its earlier forecast.

Meanwhile, the PBOC warned the government's goal to reduce debt levels and overcapacity could lift bond default risks and make it trickier for companies to raise funds.

The central bank added that the pace of U.S. interest rate rises would affect global capital flows and emerging market currencies.

The Federal Reserve meets next week to decide on interest rates but is expected to keep policy unchanged following a dovish speech by chair Janet Yellen on Monday and a weak non-farm payrolls report on Friday.