In its latest review of the global economic outlook, the International Monetary Fund says China's growth this year is now likely to clock in at 8 per cent. Picture: AFP Source: AFP
THE world's most influential economic group has cut its growth forecast for China as the headwinds for Australia's mining sector intensify.
In its latest review of the global economic outlook, the International Monetary Fund says China's growth this year is now likely to clock in at 8 per cent.
The fund has cut 0.2 percentage points from its previous forecast hard on the heels of official Chinese figures that revealed an unexpected downturn in economic activity so far this year.
It came as BHP Billiton delivered a production update for the first quarter that was generally weaker than expected.
Poor weather and maintenance work dragged on the miner's iron ore and petroleum divisions but the company said it remained on track to hit its full-year production targets.
BHP, the world's third largest iron-ore producer, revealed yesterday it had dug up 40.2 million tonnes of the commodity in the three months to March.
While the tally was 3 per cent higher than it was for the same period a year ago, it was down 5 per cent on the previous quarter.
Petroleum production, the company's second-biggest earnings division, weighed in at 55.42 million barrels of oil equivalent - 2 per cent below the same period last year and 7 per cent down on the previous quarter.
BHP's update follows a bearish production snapshot by rival Rio Tinto, which slashed its copper output by close to one-third following a massive landslide at a copper mine in the US.
Tumbling commodity prices, renewed debate about the health of the Chinese economy and warnings of a pending oversupply of iron ore are all weighing down mining stocks.
The ASX 300 resources index, which tracks the country's mining and energy companies, has plunged 17.2 per cent since the middle of February.
BHP's share price has fallen almost $7 over that time to $32.06 while Rio's is down about $17.50 to $54.59.
In its report, the IMF cut its forecast for global growth this year, from 3.5 per cent to 3.3 per cent, citing the eurozone's continuing economic woes among other problems.
"The potential impact of external risks on Asia remains considerable," the report said.
While the IMF cut its growth projections for China, the group's deputy director of research, Jorg Decressin, said he was not concerned "in any major way" about a hard landing there.
The IMF also predicts Australia's growth will come in at 3 per cent this year and 3.3 per cent next year - numbers broadly in line with Reserve Bank of Australia and Treasury projections.
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