Central bank optimistic about nation's economic outlook
By Zhou Xin and Ben Blanchard |
July 28, 2010, Wednesday
|
Print Edition
Print Edition
China's central bank said yesterday that economic growth would slow but there would be no double-dip.
In a statement on its website, the People's Bank of China said it was "prudently optimistic" about the economic outlook and ruled out any big policy changes in coming months, adding that inflationary pressure had eased.
"The possibility of an economic slowdown and stabilization is relatively big, but the possibility of a double-dip is small," the central bank said.
China's gross domestic product growth slowed to 10.3 percent in the second quarter from 11.9 percent in the first three months of 2010.
The central bank said the slowdown was an adjustment from "previous too-fast growth" and was an intended result of macroeconomic policies, including a clampdown on the property sector, restrictions on local government debt and measures to curb inflation.
The fundamentals of the world's third-largest economy remain sound partly because of the ongoing global economic recovery, the central bank said, adding that the overall external environment would be better than last year.
Specifically, the bank said the eurozone debt crisis would not lead to a global downturn and the impact on China's economy would be limited.
As for inflation, it said inflationary pressure had eased.
"The upward pressure on prices has been relieved somewhat," it said.
The base effect contributed 2.1 percentage points in Consumer Price Index growth in June and July, the bank added, as prices at the same time last year were much lower.
The bank reiterated that yuan reforms announced last month were not intended to revalue the Chinese currency.
Instead, de-pegging the yuan from the dollar would help China to "keep the yuan exchange rate basically stable at a reasonable and balanced level," the bank said, without elaborating.
It added that new bank lending in 2010 would be within 7.5 trillion yuan (US$1.11 billion) if maintained at June levels.
In a statement on its website, the People's Bank of China said it was "prudently optimistic" about the economic outlook and ruled out any big policy changes in coming months, adding that inflationary pressure had eased.
"The possibility of an economic slowdown and stabilization is relatively big, but the possibility of a double-dip is small," the central bank said.
China's gross domestic product growth slowed to 10.3 percent in the second quarter from 11.9 percent in the first three months of 2010.
The central bank said the slowdown was an adjustment from "previous too-fast growth" and was an intended result of macroeconomic policies, including a clampdown on the property sector, restrictions on local government debt and measures to curb inflation.
The fundamentals of the world's third-largest economy remain sound partly because of the ongoing global economic recovery, the central bank said, adding that the overall external environment would be better than last year.
Specifically, the bank said the eurozone debt crisis would not lead to a global downturn and the impact on China's economy would be limited.
As for inflation, it said inflationary pressure had eased.
"The upward pressure on prices has been relieved somewhat," it said.
The base effect contributed 2.1 percentage points in Consumer Price Index growth in June and July, the bank added, as prices at the same time last year were much lower.
The bank reiterated that yuan reforms announced last month were not intended to revalue the Chinese currency.
Instead, de-pegging the yuan from the dollar would help China to "keep the yuan exchange rate basically stable at a reasonable and balanced level," the bank said, without elaborating.
It added that new bank lending in 2010 would be within 7.5 trillion yuan (US$1.11 billion) if maintained at June levels.
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