Bank of America Corp. and Citigroup Inc. are among those sounding the warning that expansion will fall short this year of the 8.2% anticipated by the consensus of economists. The slump could last into next year, forcing growth below 5%, they warn. Outside 2020’s 2.3%, that would be the weakest in three decades.
Strategists at Bank of America muse that Xi may even be embracing a once-in-two decades restructuring of the economy akin to Deng Xiaoping’s modernizations of the late-1970s and Zhu Rongji’s revamping of state-enterprises and finance in the 1990s“. If so, the data flow from China could confound even the pessimists, and we are on guard for that scenario unfolding,” the strategists, led by Ajay Kapur, told clients in a report last week, in which they predicted growth of 7.7% this year and 4% in 2022.