lundi 16 janvier 2012
No Hard Landing, but a Slowdown of growth for China in 2012
Nouriel Roubini : I do not expect a hard landing, but a slowdown of growth for China in 2012. My view is more bearish than consensus. Chinese growth is going to be around 8% this year, much lower than what it has been in the last few years.There is a risk of hard lending, but that hard lending may materialize only in 2013 or 2014. There is a delicate political transition in China by November, to choose a new President and Premier and therefore China is going to do anything necessary to prevent the hard lending from occurring.The problem with China is that the growth model is not sustainable. It is based on net export growth. Fixed investment is now 50% of GDP, on high savings and with a very low level of consumption right now is only one-third of GDP.So unless China can consume more, save less, reduce net exports and fixed investments and make its growth more balanced eventually China could have a hard lending, but that is a 2013-2014 story.As far as India is concerned, there has been a slowdown of economic growth in the last few quarters. The economic data is mixed and this year growth might be only 7%. India is facing a variety of issues, fiscal deficit, current account deficit that has to be financed.The rupee has been weakening. Inflation until recently had been rising and more importantly there has been a policy stalemate. A number of structural reforms have to be undertaken in order to make sure that potential growth becomes higher so that India can grow faster without causing higher inflation.Owing to coalition politics, a wide range of important state elections coming up in the next few months, the policy has been essentially in a stalemate. Important economic and structural reforms that should be undertaken have been essentially stalled. That is not good news for accelerating economic growth over time.