BUSINESS

IMF cuts China economic growth forecast, warns 'hard landing' still possible

07/16/2012 09:43 EDT | Updated 09/15/2012 05:12 EDT
BEIJING, China - The International Monetary Fund has cut its growth forecast for China and warned a "hard landing" is still possible.

The IMF reduced its growth outlook Monday for the world's second-biggest economy this year by 0.2 percentage points to 8 per cent.

Growth slowed to a three-year low of 7.6 per cent in the three months ending in June. On Sunday, Premier Wen Jiabao warned the country's recovery was not yet stable.

The slowdown has dampened hopes China might help to drive global growth while the United States struggles with a sluggish recovery and European output is forecast to shrink.

The IMF said there still were risks of a "hard landing," or abrupt downturn in growth, in China because investment spending might slow due to overcapacity in some industries.