BBVA lowers its global growth forecasts for 2014, trims China outlook

HONG KONG – In its latest economic update, BBVA Bank says that while global growth should accelerate in 2014, downside risks are still present from QE tapering - and turmoil in emerging markets. “We have slightly lowered our global growth projections to 3.4% in 2014 and to 3.8% in 2015 on account of recent out-turns,” BBVA says.

BBVA’s growth projections for China have been trimmed to 7.2% from 7.6% for 2014 and to 7.0% from 7.5% for 2015.  “The financial fragilities continue to act as headwinds to short-term growth. The focus now is on implementing the reforms announced at November’s Third Plenum,” the bank says.
 “Risks are still to the downside. With the deepening of structural reforms, the authorities need to draw a fine line between sustaining short-term growth and boosting long-term growth potential.”
BBVA says growth momentum in China slowed in Q1, primarily because of sluggish investment demand. “The authorities have shown a greater tolerance for somewhat lower growth, seeking to push for structural reforms and to contain financial risks,” it says. www.bbvaresearch.com (ATI).