China's economy expected to decelerate 6.5% in 2018

The country's debt burden may drag performance next year.

Asia’s largest economy is projected to slow down with an expected 6.5% GDP decline next year as it rebalances towards a more sustainable growth plan, according to Natixis Asia Research.

China’s economic deceleration is unavoidable given the headline slowdown across broad-based segments in Q3 and the impact from its growing debt burden but Natixis notes that it can be achieved at a controlled pace through effective policy implementation and capital controls.

Most economic indicators declined in Q3 after three consecutive quarters of expansion with export and import growth easing to 6.9% and 17.2% respectively.

Value added also decreased to 6.2% in the same period and fixed asset investment dipped 7.3% dragged by the underperformance of heavy and high-polluting industries.

CPI inflation also reached its highest level this year in as it posted 1.9% YoY in October due to higher levels of producer prices that transmit inflationary pressure to consumer goods.