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BW Businessworld

Citigroup Cuts Global, India Growth View

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Citigroup cuts its global growth forecasts for this year and next, with sharp reductions for the United States, euro zone and United Kingdom, as well as modest cuts for China and India.

The brokerage cut its global gross domestic product (GDP) growth forecast for 2011 to 3.1 per cent from 3.4 per cent, and for 2012, to 3.2 per cent from 3.7 per cent.

Citigroup said it does not currently expect recessions in the major economies as this slowdown in economic growth is not enough to reverse global profits.

"But we do expect advanced economy growth will remain sluggish to end-2012 at least, with rising unemployment," the brokerage said in a note to clients dated Aug 24.

For advanced economies, Citigroup cut its growth forecast to 1.4 per cent from 1.8 per cent for 2011, and to 1.7 per cent from 2.2 per cent for 2012.

Citigroup also cut its growth forecast for China to 9.0 per cent from 9.2 per cent for 2011, reflecting weakness in major export markets.

The brokerage does not expect an interest rate hike this year in the world's second largest economy, but sees faster yuan appreciation.