HSBC Holdings Plc, the British multinational banking and financial services, downgraded its growth estimates on Friday, pointing risks to emerging markets from the slowing economy of China and the recent news of scaling back Feds bond-purchasing program.
“The Fed might be thinking of monetary tapering but, for us, the only tapering is of our growth forecasts,” warned Stephen King, HSBCs chief economist, HSBCs global economist, in their third quarter global outlook cited by CNBC.
The financial company cut its forecast for world growth to 2% in 2013, from an earlier prediction of 2.2%. It also downgraded its 2014 outlook to 2.6%.
King said the downgrade was entirely due to concerns about the outlook in developing countries which argues against hopes that emerging market would boost economic growth. The HSBC decision came just a day after research firm Capital Economics said that emerging market growth had slowed to its weakest pace since the financial crisis.
Average growth in Asia, South America and emerging markets in Europe declined to 4% on a yearly basis in the first quarter, according to data from Capital Economics and Thomson Datastream cited by CNBC. The average emerging market growth has been 6.4% in the past ten years.
Meanwhile, HSBC downgraded its outlook for Brazilian growth to 2.4% in 2013 and 3.0% in 2014. India growth was adjusted by the company to 5.1% this year and 6.5% for 2014.
Company shares are down 0.18% to GBP 681.50 at 14:22 London time, adjusting to to a 2.55% year to date advance.
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