OECD cuts China's growth forecast

The Organization for Economic Co-Operation and Development (OECD) lowered its growth prediction for China to 8.5% for 2013, down from a 9.3% May forecast, Reuters reported. The change comes amid sustained crisis in the eurozone that could stem demand for China’s exports, the international economic think-tank said Tuesday. During the next two years, growth in exports will not be higher than 9%, a significant slowdown from the last 10 years when yearly growth averaged roughly 22%. If economies in Europe continue to deteriorate, China’s GDP expansion could fall 0.6 percentage points next year and 1.3 percentage points in 2014, according to the OECD. It said it anticipated that such a scenario would result in a 40% fall in share index levels and a 3 percentage-point increase in long-term government bond margins in eurozone countries over the next two years.