On June 30, 2015, Bank of China issued its report for Q3 2015 Economic and Financial Outlook (hereinafter referred to as the "report"). In this report, there is an outlook for the global and China's economic and financial situation and the world banking industry in Q3, based on the review of Q2 2015. Meanwhile, some hot issues are analyzed in the report.

Global Economic and Financial Outlook: The global economy will maintain a recovery trend, while regional differentiation still exists, and the economic growth is expected to reach 3%. In the first half of 2015, the global financial system was generally stable, and the US Risk of Financial Crisis Index kept in the security zone, yet the financial risks of emerging markets increased to some degree. At present, the global liquidity is in a new round of expansion cycle, driving the boom of the global stock market, so close attention should be paid to the risks of an interest rate hike by the Fed, the global economic slowdown and industrial preference adjustment. The federal funds rate is estimated to slowly ramp up from the end of 2015 and speed up rising in 2017. The negotiation for the Greece debt problem came to a deadlock, and the short-term financing environment in Greece may deteriorate in the future. RMB will play an important role in the cross-border capital flows and financing arrangements under the "One Belt and One Road" initiate, so communication and consultation should be strengthened so as to expand the integrating point of different interests.

China's Economic and Financial Outlook: In Q2, major economic indicators continued to go down under the influence of weak external demand, excess production capacity and deleveraging. Looking into the three quarter, China's economy is expected to stabilize and slightly rebound, given the continuing effects of growth-stabilizing policies, easing funding constraints and a low base in the last year. The Q3 GDP is predicted to grow at around 7%, while CPI may go up by about 1.5%. Although the economic growth has picked up, the recovery base is still very weak and the downturn pressure is high, so stabilizing growth still needs to be the focus of economic work. Fiscal policy is supposed to speed up the implementation of the expenditure budget, intensify efforts to cut taxes and lower costs, and push forward the replacement of local debt in an active and stable pace. At the same time, monetary policy needs to make use of various policy tools, as well as lower the deposit reserve ratio and interest rate according to the actual need of economy so as to guide social financing costs down.

Global Banking Industry Outlook: Since the first quarter of 2015, the global banking industry has tended to perform stable as a whole, with some new risk factors. Maintaining sound operation is still the theme of the banking development. The US banking industry has significantly improved its profitability, while the normalization of Fed's monetary policy will become the biggest challenge. In the banking sector of Euro Zone, the scale of deposit and lending has witnessed a steady recovery and the capital strength continues to rise, but an overall improvement in the external environment still remains to be seen. British banking has moderately expanded its credit and evidently improved its asset quality; however, it is also confronted with some uncertainties such as exiting from the EU and an unexpected interest rate hike. China's banking industry has kept an overall solid development despite great operating pressure, but the growth in the size of listed banks has continued to slow down with the decline of profitability and rise of the non-performing loan pressure. Looking into the third quarter, China's banking industry will face some new development opportunities, and sustainable sound operation will become the key for the banking industry to meet challenges.

Please click to download:

  • A Global Economic and Financial Outlook (Q3 2015).pdf
  • B China's Economic and Financial Outlook (Q3 2015).pdf
  • C Global Banking Industry Outlook (Q3 2015).pdf




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