OECD slashes China growth forecast, calls for reform roadmap

PanARMENIAN.Net - The OECD on Wednesday, May 29 slashed its forecast for China's 2013 economic growth to 7.8 percent, the same as last year's actual rate, from a previous 8.5 percent, citing weakening domestic demand amid global uncertainties, Reuters reproetd.

Growth in the world's second-largest economy may recover to 8.4 percent in 2014 on increased policy support, the Organisation for Economic Co-operation and Development (OECD) said its latest report on the global economic outlook.

In March, the OECD forecast China's economy could expand 8.5 percent this year and 8.9 percent in 2014 - the most upbeat assessments of any of the major multilateral institutions.

China's economic growth slowed to a 13-year low of 7.8 percent in 2012, undermined by tepid demand in the European Union and the United States - the two biggest export customers.

Earlier on Wednesday, the International Monetary Fund cut its growth forecast for China this year to 7.75 percent from a previous 8 percent, citing a weak world economy and exports.

Many private economists have already been lowering their estimates after soft factory output and investment performance data for April and weak factory activity in May.

Weaker domestic demand has become the main drag on growth into 2013 as a marked easing in inventory accumulation slows capital formation, while Beijing's campaign targeting official extravagance cools consumption, the OECD said.

The OECD called or a detailed roadmap for reforms.