UBS Securities cuts China growth forecasts

BEIJING -- UBS Securities has lowered its 2012 economic growth forecast for China by half a percentage point to 7.5 percent because of slowing exports and weakened domestic demand.

The institution also cut its growth forecast for China in 2013 to 7.8 percent from a previous projection of 8.3 percent, UBS Securities economist Wang Tao said in a report given to the institution's clients.

"In recent months, economic activity has remained weak as export growth slowed. Policy support was not as rapid or aggressive as previously envisioned," Wang said.

The country's economy expanded 7.6 percent in the second quarter of the year, the worst performance in more than three years.

A string of economic statistics due for release Sunday are expected to show further growth moderation for August.

Wang estimated that the consumer price index, a main gauge of inflation, may rise 2 percent in August from one year earlier and rebound by more than 2.5 percent in the fourth quarter.

She said the Chinese central government will not unveil a new stimulus package in the coming months, but will instead prioritize the implementation of current policies.

To bolster growth, the country's central bank has cut benchmark interest rates twice this year and trimmed the amount of money banks must keep in reserve three times.

Wang said the central bank is likely to cut the reserve requirement ratio for banks again sometime during the year.