Citigroup, Inc (NYSE: C) Cuts Growth Forecast for U.S. and China

Citigroup, Inc (NYSE: C) analysts reduced its growth forecast for China to 9.5% for all of 2010, down from the firm’s previous estimate of 9.6% and reduced its estimate on the U.S. from 3.2% to 2.8%.

The report said that China’s economy will likely grow at 8.8% in 2011 instead of its previous estimate of 9.3%, citing a weakening Chinese economy at the end of the second quarter

“We have become somewhat less optimistic on near-term growth prospects,” said Citigroup’s Chief Economist Willem Buiter. “We think the more plausible risk is of an extended period of relatively sluggish industrial country growth over the next few years.”

The report says that the sovereign debt crisis and Europe was well as various government measures to control property prices in China raise concern over the global economic outlook. The company also cut global growth forecasts from 3.7% in 2010 and 3.3% in 2011. Previously, Citigroup, Inc (NYSE: C) said that the economy would grow at 3.8% in 2010.

Although the report suggested a tempering of China’s economy, the report boosted its 2010 growth forecast for Japan, up from 3.5% to 3.6%. The report did not fare as well for Japan’s 2011 growth forecast, which was cut from 2.1% to 1.9%.

The report said that the U.S. economy will grow at 2.8% in 2010, down from 3.2% in its previous estimate. The report also lowers growth forecast to 6.6 percent in 2010 and 5.8 percent in 2011 for emerging markets, each cut by 0.1 percent.