Tell me and I forget. Teach me and I remember. Involve me and I learn. Benjamin Franklin

Monday, October 15, 2012

Billionaire investor George Soros said China’s growth is slowing

Bloomberg News
October 15, 2012

Billionaire investor George Soros said China’s growth is slowing because household spending as a percentage of the world’s second largest economy is waning.

“The growth model which has worked is running out of steam because consumption as a percentage of GDP has fallen” to one- third of output from half, Soros said at a National Association for Business Economics conference in New York today. Central bankers “will have to modify the growth model and somehow allow the household sector to have a bigger share of the total.”

China’s economy expanded 7.6 percent in the second quarter from a year earlier, the least in three years. The IMF this month cut its estimate for China’s 2012 growth to 7.8 percent, which would be the weakest pace since 1999, from 8 percent.

Soros said the unprecedented actions global central banks have taken to stimulate growth are necessary to “prevent a depression,” yet the “big open question” is whether they can exit the stimulus programs when the economy rebounds without spurring inflation. The programs include three rounds of so- called quantitative easing by the Federal Reserve and the European Central Bank holding its main rate at a record low 0.75 percent.

To continue reading.....

No comments:

Post a Comment