Q2 growth could slow down to 7.5%, China think-thank claims
By Feng Jianmin |
May 19, 2012, Saturday
|
Print Edition
Print Edition
CHINA'S economic growth may weaken this quarter to the slowest in three years mainly due to the curbs on the property sector and weak external demand, the central government's think-tank said in a report yesterday.
The China Information Center forecast the country's gross domestic product will grow 7.5 percent in the second quarter of this year from the same period of last year, the slowest since the first quarter in 2009.
The forecast is in line with Premier Wen Jiabao's remarks in March, and was lower than the 8.1 percent growth in the year's first three months.
The report said the two factors contributing to the slowdown are "the pains" China must face during the transformation and upgrade of its economic structure.
The report comes as data showed that home prices in the country, excluding those for government-funded affordable housing, fell last month in 46 of the 70 cities tracked by the National Bureau of Statistics, a record high since the figures were first released.
The think-tank also expected inflation to cool to 3.3 percent in the second quarter due to weaker domestic demand. The Consumer Price Index rose 3.4 percent in April on an annual basis.
"China should step up fine tuning of economic policies," the report said. "It should implement tax cuts, increase support for technological transformation, and reduce fundraising cost for companies to sustain stable economic growth."
Meanwhile, Goldman Sachs yesterday cut China's annual economic growth forecast for 2012 to 8.1 percent from 8.6 percent. Growth prediction for the second quarter was lowered to 7.9 percent from 8.5 percent.
It expected more cuts in reserve requirement ratios for banks and an acceleration in approval for investment projects. It said China may cut interest rate twice in the second half of the year when inflation cools to below 3 percent.
JPMorgan, Citi Group and UBS AG have also cut growth forecast for China.
The China Information Center forecast the country's gross domestic product will grow 7.5 percent in the second quarter of this year from the same period of last year, the slowest since the first quarter in 2009.
The forecast is in line with Premier Wen Jiabao's remarks in March, and was lower than the 8.1 percent growth in the year's first three months.
The report said the two factors contributing to the slowdown are "the pains" China must face during the transformation and upgrade of its economic structure.
The report comes as data showed that home prices in the country, excluding those for government-funded affordable housing, fell last month in 46 of the 70 cities tracked by the National Bureau of Statistics, a record high since the figures were first released.
The think-tank also expected inflation to cool to 3.3 percent in the second quarter due to weaker domestic demand. The Consumer Price Index rose 3.4 percent in April on an annual basis.
"China should step up fine tuning of economic policies," the report said. "It should implement tax cuts, increase support for technological transformation, and reduce fundraising cost for companies to sustain stable economic growth."
Meanwhile, Goldman Sachs yesterday cut China's annual economic growth forecast for 2012 to 8.1 percent from 8.6 percent. Growth prediction for the second quarter was lowered to 7.9 percent from 8.5 percent.
It expected more cuts in reserve requirement ratios for banks and an acceleration in approval for investment projects. It said China may cut interest rate twice in the second half of the year when inflation cools to below 3 percent.
JPMorgan, Citi Group and UBS AG have also cut growth forecast for China.
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