Monday, October 8, 2012

China and Russia have growth forecasts cut



Published on Oct 8, 2012 by
http://www.euronews.com/ The World Bank has revised its growth forecasts for Russia and China, saying the two economic giants will not grow as much as it had expected.

The report further suggests that there is the risk that the slowdown in China could get worse and last longer than many analysts had predicted.

The Word Bank's chief economist for the region said China is experiencing a two-pronged attack on its growth, from weakening exports and a slowdown in domestic demand.

That double whammy in the world's second biggest economy has made the bank shave half a per centage point from its forecasts for this year and next.

The twice yearly Russian Economic Report contained similarly amended predictions on growth plus a warning on inflation.

It said that whereas earlier in the year growth was on the up and inflation was falling, now it is the other way around.

Shortages of labour have already pushed wages up by 10 per cent in the first eight months of the year, threatening to wipe out Russia's competitiveness.

The report also points out that this slowdown in growth comes at a time when oil, Russia's main export, is fetching record high prices.

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