Slower pace likely for GDP growth
By Wang Yanlin |
July 13, 2010, Tuesday
|
Print Edition
Print Edition
CHINA'S economy is expected to expand at a slower pace in the second quarter of this year than that in the first three months, analysts said, adding that policy makers will have to confront real challenges next year.
Its gross domestic product may grow 10.6 percent from a year earlier in the second quarter, according to an estimate by Pei Changhong, director of the Institute of Finance and Trade Economics under the Chinese Academy of Social Sciences.
The projection was similar to the forecast of a 10.5 percent increase on average by a Reuters poll.
"All 32 economists polled by Reuters predicted a moderation in China's year-on-year growth rate in the second quarter although the expansion rate could still be in double digits," the agency said in a note yesterday.
"This comes as no surprise because first-quarter figures were flattered by a low comparative base effect stemming from the financial crisis."
Pei also viewed that China's economic growth will slow quarterly, with the expansion rate at 10.1 percent in the third quarter and 9.3 percent in the fourth, compared with a surge of 11.9 percent in the first three months.
"The real challenges for macro-economic control will emerge next year," Pei said. "At that time, China will have to face fading effect of the stimulus package while the global economy would still be full of uncertainties like the sovereign debt crisis which could sap the country's trade growth."
The People's Bank of China reiterated last week that its relatively loose monetary policy would continue during the rest of this year.
Inflationary pressure will continue to grow, analysts said. Pei forecast the Consumer Price Index, the main gauge of inflation, to rise 3 percent in the second quarter, picking up from the increase of 2.2 percent in the first three months.
The Reuters poll showed economists predicted an even bigger CPI rise of 3.3 percent for the second quarter, well above the 3 percent cap set by the central government at the start of this year.
"Consumer inflation is expected to have increased in the year to June, but the month-on-month figure could show that consumer inflationary pressures have reached a peak as food prices fell," the Reuters note said.
Its gross domestic product may grow 10.6 percent from a year earlier in the second quarter, according to an estimate by Pei Changhong, director of the Institute of Finance and Trade Economics under the Chinese Academy of Social Sciences.
The projection was similar to the forecast of a 10.5 percent increase on average by a Reuters poll.
"All 32 economists polled by Reuters predicted a moderation in China's year-on-year growth rate in the second quarter although the expansion rate could still be in double digits," the agency said in a note yesterday.
"This comes as no surprise because first-quarter figures were flattered by a low comparative base effect stemming from the financial crisis."
Pei also viewed that China's economic growth will slow quarterly, with the expansion rate at 10.1 percent in the third quarter and 9.3 percent in the fourth, compared with a surge of 11.9 percent in the first three months.
"The real challenges for macro-economic control will emerge next year," Pei said. "At that time, China will have to face fading effect of the stimulus package while the global economy would still be full of uncertainties like the sovereign debt crisis which could sap the country's trade growth."
The People's Bank of China reiterated last week that its relatively loose monetary policy would continue during the rest of this year.
Inflationary pressure will continue to grow, analysts said. Pei forecast the Consumer Price Index, the main gauge of inflation, to rise 3 percent in the second quarter, picking up from the increase of 2.2 percent in the first three months.
The Reuters poll showed economists predicted an even bigger CPI rise of 3.3 percent for the second quarter, well above the 3 percent cap set by the central government at the start of this year.
"Consumer inflation is expected to have increased in the year to June, but the month-on-month figure could show that consumer inflationary pressures have reached a peak as food prices fell," the Reuters note said.
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