China may cut benchmark interest rates up to two more times this year as part of “aggressive” easing to counter the nation’s slowdown, said Ding Shuang, a Citigroup Inc. economist.
“China’s economy is still on a downward trend,” Ding, who formerly worked for the People’s Bank of China, told Bloomberg Television in Hong Kong today. “We do not see a clear turning point yet, and policy support is very much needed in order to stabilize growth.”
The expansion this quarter may be “very weak” at 7 percent to 7.5 percent, Ding said after the government announced data for industrial production, inflation, fixed-asset investment and exports over the past two days. Better-than-forecast trade growth in May may not be sustained as a likely recession in the European Union restrains demand, he said.
The central bank last week cut rates for the first time since 2008 in what Ding said was a “very strong signal of more aggressive policy easing.”
Overseas shipments climbed 15.3 percent in May from a year earlier, the customs bureau said yesterday, exceeding all 29 estimates in a Bloomberg News survey. Industrial output rose by less than 10 percent for a second month and retail sales increased the least in almost six years excluding holiday-month distortions, statistics bureau reports showed June 9.
“Growth seems to have stabilized but at a very low level,” he said. “Industrial production continued to disappoint.”