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World Bank sees China GDP at 8.2% in 2012
By Wang Yanlin |
April 12, 2012, Thursday
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Online Edition
Online Edition
INTERNATIONAL financial institutions have cut their estimates for China's 2012 economic growth one after another.
The World Bank today explained China will go through a gradual economic growth adjustment, forecasting the world's second-largest economy will see its gross domestic product growth ease to 8.2 percent from a year earlier in 2012.
This compared with a 8.7 percent projection made last year.
The Washington-based bank's announcement came in tandem with the Asian Development Bank, who said China's economic growth may ease to 8.5 percent this year, compared with an earlier judgment of 9 percent.
"The Chinese economy is in the midst of a gradual slowdown," the World Bank said in its China Quarterly Update.
"A weaker global economic environment and tighter domestic policies combined to slow China's GDP growth. Cyclical weakness is expected to dominate the near-term outlook, with growth projected at 8.2 percent in 2012 and 8.6 percent in 2013," the bank report said.
The World Bank seemed less optimistic than the Asian Development Bank. But it said China is still on track for a soft landing, and both institutions' forecasts are higher than the Chinese government target of 7.5 percent for this year.
"China's consumption growth slows somewhat, investment growth decelerates more pronouncedly and external demand remains weak," said Ardo Hansson, World Bank's lead economist for China. "The risks of overheating are moderating, increasing the prospects to achieve a soft landing."
In comparison, the Asian Development Bank is still positive about China's investment and consumption, saying they can drive the country's economic advance when exports stay weak.
China's economy has shown clear signs of slowdown. The gross domestic product expanded 8.9 percent in the final quarter of last year, the slowest in two and a half years.
The National Bureau of Statistics is set to release the first quarter's key economic data tomorrow, and analysts expect the growth rate to ease further to 8.5 percent.
The World Bank said the main challenges for a soft landing in China include weak and uncertain growth prospects of developed economies and the evolution of the ongoing correction in China's property markets.
"Sufficient policy space exists to respond to downside risks, but any policy response will need to be carefully crafted by decision makers who keep in mind longer-term effects and objectives," the report said.
Economists said China needs to further ease monetary policies to sustain growth. Interest rate cuts had been suggested earlier, as it is effective to stimulate domestic demand.
But after China reported a more-than-expected inflation rate of 3.6 percent in March, economists said one more reserve requirement ratio reduction may be appropriate.
The World Bank today explained China will go through a gradual economic growth adjustment, forecasting the world's second-largest economy will see its gross domestic product growth ease to 8.2 percent from a year earlier in 2012.
This compared with a 8.7 percent projection made last year.
The Washington-based bank's announcement came in tandem with the Asian Development Bank, who said China's economic growth may ease to 8.5 percent this year, compared with an earlier judgment of 9 percent.
"The Chinese economy is in the midst of a gradual slowdown," the World Bank said in its China Quarterly Update.
"A weaker global economic environment and tighter domestic policies combined to slow China's GDP growth. Cyclical weakness is expected to dominate the near-term outlook, with growth projected at 8.2 percent in 2012 and 8.6 percent in 2013," the bank report said.
The World Bank seemed less optimistic than the Asian Development Bank. But it said China is still on track for a soft landing, and both institutions' forecasts are higher than the Chinese government target of 7.5 percent for this year.
"China's consumption growth slows somewhat, investment growth decelerates more pronouncedly and external demand remains weak," said Ardo Hansson, World Bank's lead economist for China. "The risks of overheating are moderating, increasing the prospects to achieve a soft landing."
In comparison, the Asian Development Bank is still positive about China's investment and consumption, saying they can drive the country's economic advance when exports stay weak.
China's economy has shown clear signs of slowdown. The gross domestic product expanded 8.9 percent in the final quarter of last year, the slowest in two and a half years.
The National Bureau of Statistics is set to release the first quarter's key economic data tomorrow, and analysts expect the growth rate to ease further to 8.5 percent.
The World Bank said the main challenges for a soft landing in China include weak and uncertain growth prospects of developed economies and the evolution of the ongoing correction in China's property markets.
"Sufficient policy space exists to respond to downside risks, but any policy response will need to be carefully crafted by decision makers who keep in mind longer-term effects and objectives," the report said.
Economists said China needs to further ease monetary policies to sustain growth. Interest rate cuts had been suggested earlier, as it is effective to stimulate domestic demand.
But after China reported a more-than-expected inflation rate of 3.6 percent in March, economists said one more reserve requirement ratio reduction may be appropriate.
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