ADB lowers its forecast of China's economic growth
By Wang Yanlin |
April 12, 2012, Thursday
|
Print Edition
Print Edition
THE Asian Development Bank has lowered its projection of China's economic growth rate for this year to 8.5 percent from a previous 9.1 percent, citing external risks that threaten exports.
But the Manila-based bank is still positive about China's investment and consumption, which it says can drive the country's economic advance.
"China's economic growth is set to moderate slightly over the next two years but will still exceed 8 percent annually on the back of strong investment, rising private consumption and a more stable global economy," the bank says in its Asian Development Outlook 2012 released yesterday.
China's gross domestic product may expand 8.5 percent annually this year and 8.7 percent in 2013, said the bank, which last September estimated a rate of 9.1 percent for 2012.
"The global environment remains very uncertain but China is showing healthy signs of economic diversification with domestic consumption up and the trade surplus down," Changyong Rhee, the bank's chief economist, said.
He said the main risk was uncertainty over external demand from China's larger trading partners - slow recovery in the United States, fiscal and debt concerns in the European Union, and Japan's economic setbacks.
But progress in diversifying the export market and efforts to rebalance the source of growth toward domestic demand should help maintain economic momentum, Rhee said.
China has shown signs of an economic slowdown. Its gross domestic product expansion of 8.9 percent in last year's final quarter was the slowest in two and a half years.
The National Bureau of Statistics is due to release the first quarter's key economic data tomorrow, and analysts expect the growth rate to ease to 8.5 percent because of weak demand both at home and abroad.
The bank was comparatively optimistic about China's economic outlook.
It said China's fixed-asset investment was likely to remain the main engine of growth, expanding more than 20 percent in 2012 and 2013, with public infrastructure and housing partially offsetting a slowdown in private sector real estate construction.
People's consumption is forecast to grow about 12 percent over the next two years, supported by employment and wage growth, as well as government social expenditure. Inflation growth may ease to about 4 percent, the bank said.
There will be some challenges for policy-makers, the bank said, including tackling income equality and reducing pressure on natural resources, both of which threaten the sustainability of future growth and poverty reduction.
"This will require stepped-up investment in rural areas and more comprehensive social security safety nets, as well as stronger management of water and other natural resources," Rhee said.
"With a strong fiscal position and declining inflation, the government is now well placed to push ahead with planned measures to reduce regional and rural-urban income gaps and to cut industrial water consumption and energy use, which will help accelerate the country's economic transformation," he said.
Weak global demand will continue to weigh on development across Asia this year, the bank said. But the growth rates in most economies will remain robust, with private consumption providing support. It projected gross domestic product in Asia (excluding Japan) to expand 6.9 percent this year and rise to 7.3 percent in 2013.
But the Manila-based bank is still positive about China's investment and consumption, which it says can drive the country's economic advance.
"China's economic growth is set to moderate slightly over the next two years but will still exceed 8 percent annually on the back of strong investment, rising private consumption and a more stable global economy," the bank says in its Asian Development Outlook 2012 released yesterday.
China's gross domestic product may expand 8.5 percent annually this year and 8.7 percent in 2013, said the bank, which last September estimated a rate of 9.1 percent for 2012.
"The global environment remains very uncertain but China is showing healthy signs of economic diversification with domestic consumption up and the trade surplus down," Changyong Rhee, the bank's chief economist, said.
He said the main risk was uncertainty over external demand from China's larger trading partners - slow recovery in the United States, fiscal and debt concerns in the European Union, and Japan's economic setbacks.
But progress in diversifying the export market and efforts to rebalance the source of growth toward domestic demand should help maintain economic momentum, Rhee said.
China has shown signs of an economic slowdown. Its gross domestic product expansion of 8.9 percent in last year's final quarter was the slowest in two and a half years.
The National Bureau of Statistics is due to release the first quarter's key economic data tomorrow, and analysts expect the growth rate to ease to 8.5 percent because of weak demand both at home and abroad.
The bank was comparatively optimistic about China's economic outlook.
It said China's fixed-asset investment was likely to remain the main engine of growth, expanding more than 20 percent in 2012 and 2013, with public infrastructure and housing partially offsetting a slowdown in private sector real estate construction.
People's consumption is forecast to grow about 12 percent over the next two years, supported by employment and wage growth, as well as government social expenditure. Inflation growth may ease to about 4 percent, the bank said.
There will be some challenges for policy-makers, the bank said, including tackling income equality and reducing pressure on natural resources, both of which threaten the sustainability of future growth and poverty reduction.
"This will require stepped-up investment in rural areas and more comprehensive social security safety nets, as well as stronger management of water and other natural resources," Rhee said.
"With a strong fiscal position and declining inflation, the government is now well placed to push ahead with planned measures to reduce regional and rural-urban income gaps and to cut industrial water consumption and energy use, which will help accelerate the country's economic transformation," he said.
Weak global demand will continue to weigh on development across Asia this year, the bank said. But the growth rates in most economies will remain robust, with private consumption providing support. It projected gross domestic product in Asia (excluding Japan) to expand 6.9 percent this year and rise to 7.3 percent in 2013.
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