Global Stocks Fall on Growth Concerns

China’s economic growth is expected to slow to 6.5 percent in 2016 from an expected 6.8 percent in 2015, even as the central bank eases policy further to ward off a sharper slowdown, a Reuters poll showed.

China could also further relax its control over the yuan, which many expect will be devalued.

In currencies, the euro rose 0.2% against the dollar to $1.1410, while the dollar was 0.2% lower against the yen at Yen119.49. Growth data for the third quarter is due next week.

The bureau has changed the way quarterly gross domestic product data is calculated, a move it calls a step to adopt worldwide standards and improve the accuracy of Chinese numbers. It also supported speculation that the U.S. Federal Reserve – which for a few reason seems to think that the price of tea in China is within its zone of concern – would hold steady on interest rates this year.

“Monetary policy will be loosened as the economy faces downward pressure, and easing inflation will create bigger room for monetary policy loosening”, Xu Gao, chief economist at China Everbright Securities, said in a research note.

“Despite this weaker growth profile, services have been the strongest growing component of China’s economy for the past three years, as well as being the key driver of growth in the first half of 2015”, the report said.

While a slowdown in food prices pulled down China’s consumer price index to 1.6 percent in September from 2 percent in August, the producer price index extended its slide to a 43rd straight month, reflecting continued weak domestic demand.

Weak demand at home and overseas and a cooling property market have weighed on activity, while a government anti-corruption campaign has slowed new projects and dampened consumption.

The Shanghai Composite Index closed 0.9% lower, while Hong Kong’s Hang Seng Index lost 0.7% and Japan’s Nikkei Stock Average fell 1.9%.

A raft of monthly indicators will be released with the GDP data, and analysts will be looking for signs as to whether momentum is still fading or if the economy may be slowly stabilizing.

Annual retail sales growth was seen at 10.8 percent in September, unchanged from August.

Earlier trade data shows China’s exports fell less than expected in September, with monthly figures showing recovery.