Citigroup cuts its global economic forecast, also reducing China’s outlook

Citigroup has lowered its full-year global growth forecasts for 2010 and 2011, releasing its strategy report Thursday. Besides, the bank also cut its outlook for China’s 2010 economic expansion by 1%.

The Citigroup report was published as Federal Reserve Chairman reported Wednesday he sees the US economic outlook remains “unusually uncertain.” Europe’s debt crisis and China’s steps to curb property prices have fueled concern that global economic growth will slow.

China’s GDP growth forecast was cut to 9.5%, that appeared to be Citigroup’s biggest one-month reduction in the country’s outlook since late 2001.

Meantime, Citigroup forecast global GDP to soar by 3.7% this year and 3.3% in 2011, trimming its previous forecasts by 0.1% each.

The bank also cut its 2010 and 2011 outlook for the US and emerging markets, while reducing Japan’s outlook for next year.

 Citigroup said China will grow at an 8.8% rate next year, 0.5% points lower than previously forecast, because the economy began to show more signs of weakness at the end of the second quarter, according to the report.

Citigroup also predicts emerging markets may increase by 6.6% this year and 5.8 percent in 2011, 0.2% and 0.1% lower than previously forecast. The US 2010 forecast was cut by 0.4%, to 2.8%, and its 2011 outlook was reduced to 2.6% , from 2.8%.

Besides, the bank forecasts Japan’s GDP to  expand by 3.6% this year, that’s 0.1%  more than previously forecast. The country’s growth in 2011 will be 1.9%, 0.2% slower than the previous forecast.