Concern over China’s economy has prompted several ratings agencies and investment banks to lower their growth forecasts for the Chinese economy in 2021.

Fitch, Nomura and Goldman Sachs have all revised downwards their 2021 GDP forecasts for the world’s second largest economy.

This follows the news last week that Chinese firm Evergrande, the worlds most indebted property developer, defaulted on a foreign held bond.

Goldman Sachs now expects the Chinese economy to grow at 7.8% in 2021 compared with last year, lower than its previous forecast of 8.2%, while Fitch has forecast 2022 growth at 5.5%.

A slowdown in property sales and construction activity, coupled with local Covid-19 restrictions, are said to be weighing on the economy.

Chinese president Xi Jinping announced last September that China aims to reach peak emissions by 2030 and become carbon neutral by 2060.

Efforts to reduce emissions, along with a shortage of coal, have pushed coal prices to record highs and disrupted manufacturing across several regions, according to Reuters. Goldman Sachs estimates that up to 44% of China’s industrial activity has been affected.

Markets in Europe and the US reacted negatively to the news, which together with concerns over inflation, have rattled investors.

Agrifood shares have been somewhat volatile over the past few weeks. Both Kerry and Nestlé have seen their value fall in the past week by 4% and 2.6% respectively.

China is the main powerhouse of Southeast Asia, a key growth region for the agrifood sector. Negative sentiment regarding medium term GDP growth is likely to weigh on Agrifood shares and market prospects.