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Home >Expats Living in ShanghaiADB predicts economy growing by 9.6%
Update：2013-12-10 00:56 Views：
CHINA'S economy is expected to grow 9.6 percent this year as inflation remains a threat for the Asia's growth engine as well as other economies in the region, the Asian Development Bank said in its annual report released yesterday.With inflation pressures building and tightened monetary policy, China's gross domestic product growth was forecast to moderate this year, compared with 10.3 percent growth in 2010, the ADB said. It forecast growth of 9.2 percent in 2012.
The cutback in growth compared to last year is primarily a result of slowing investment and exports, the Manila-based bank said.
Inflation may rise to 4.6 percent this year, lifted by abundant liquidity and higher food and commodity prices. It will scale back to 4.2 percent in 2012 as commodity prices level off, the bank said.
"Fixed asset investment will remain a key driver of growth over the next two years, although the rate of expansion is set to decelerate slightly from past levels due to the winding back of fiscal stimulus measures and tighter monetary policy," it said.
"A moderation in export and industrial output growth will also cost the growth rate somewhat as demand from major markets will remain sluggish and as tax rebates on some export products expire," it added.
On Tuesday, the People's Bank of China announced the second interest rates increase this year, targeting runaway consumer prices.
The country also announced in its 12th Five-Year Plan starting 2011 that the government would further revamp China's economic structure, making it rely less on exports.
"The need to transform the pattern of economic growth is stronger now than when the 11th Five-Year Plan began," said Changyong Rhee, ADB's chief economist. "Global imbalances have become more pronounced, and the recent global recession highlighted the risk of heavy reliance on foreign demand for growth."
The bank said further weakening in external demand would pose a risk to China's economic outlook, especially in the European Union.
"With the slowdown in major industrial economies, China has been diversifying its export markets, as well as increasing direct overseas investments which hit a record US$59 billion in 2010," the bank said. "The government has laid out measures to rebalance economic drivers by putting more emphasis on domestic consumption and services."
The bank predicted private consumption will expand by 12.6 percent this year. Merchandise export growth will weaken to about 20 percent and 18 percent in 2012.
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