GDP growth forecast pegged at 2.3% for 2012

Analysts are waiting to see is if the Chinese growth slowdown and Eurozone debt crisis stabilize by the fourth quarter.

OCBC Treasury Research noted:

The revised Q2 GDP growth may be revised up to higher to 2.3% yoy (0.8% qoq saar). Our full-year GDP growth forecast remains at 2.3% for 2012 and 3.5% for 2013.

What we are waiting to see is if the Chinese growth slowdown and Eurozone debt crisis stabilize by Q4, and also whether the domestic manufacturing and services momentum will dip further in Q3 should market confidence unwind further.

The market assumption is that monetary policy support will be forthcoming, but that may run out of steam if FOMC and ECB don’t deliver by September.