Jim O’Neill, chairman of Goldman Sachs Asset Management, said he expects China’s central bank to continue cutting interest rates to shore up the economy.
“I think they need more interest-rate cuts,” O’Neill said in an interview with Bloomberg Radio from London today. “Inflation has come down sharply, probably more than they expected, and the economy of course has weakened quite a bit, too. It’s pretty obvious we’re going to get more rate cuts.”
China’s leaders pledged today to keep adjusting policies to ensure stable economic growth this year, with the Politburo reiterating the country will pursue a “prudent” monetary policy and “proactive” fiscal policy. The central bank has cut interest rates twice since early June, reduced banks’ reserve requirements three times since November and sped approvals for investment projects as economic growth weakened.
O’Neill also said that “it’s rather good” that emerging economies “worry so much” about the euro area’s fiscal crisis as it will encourage them to pay more attention to their own imbalances.