BoCom predicts slow growth and drop in consumer prices
Source: Xinhua |
July 26, 2010, Monday
|
Print Edition
Print Edition
CHINA'S economic growth will likely slow down in the second half of this year, while consumer prices would fall from its peak, the Bank of Communications said in a report released on Saturday.
"For China, it is never a recession unless the economic growth drops below 7 percent," said Lian Ping, chief economist with the Shanghai-based bank.
He said the growth rate would remain around 9 percent, which is sustainable and healthy for the economy.
China's exports, a major force driving the economic growth, would continue to rebound in the second half, and the growth for the entire year would stay above 20 percent, the fifth-largest commercial bank said in its report.
In the latter half of 2010, it tipped consumption to grow by 18.5 percent from a year ago while expecting investment growth to drop steadily to about 21 percent due to government's support to the private sector and strategic emerging industries.
Increasing labor costs, resources and food prices are expected to push up the consumer prices, but the growth is likely to be restrained in the second half due to the slowing money supply, according to the report.
China's gross domestic product expanded 11.1 percent in the first six months of this year from the previous year, data made available from the National Bureau of Statistics showed.
China's consumer price index stood at 2.6 percent in the first half of 2010, while retail sales and fixed asset investments grew 18.2 percent and 25 percent year on year, respectively.
China would maintain a stable monetary policy, the report said, for the rest of the year since the global economic condition remained complicated. The bank also ruled out the possibility of an interest rate hike.
The bank estimated that new loans for the entire year would stand between 7 trillion yuan (US$1.03 trillion) to 8 trillion yuan.
The Bank of Communications also suggested that the Chinese government was likely to remain tough on the property sector, but there is little possibility of additional curbs on the market.
Property investments would largely fall, but it also ruled out any significant decline in property prices.
Lian suggested that the government should work to keep market liquidity at a reasonable level.
"For China, it is never a recession unless the economic growth drops below 7 percent," said Lian Ping, chief economist with the Shanghai-based bank.
He said the growth rate would remain around 9 percent, which is sustainable and healthy for the economy.
China's exports, a major force driving the economic growth, would continue to rebound in the second half, and the growth for the entire year would stay above 20 percent, the fifth-largest commercial bank said in its report.
In the latter half of 2010, it tipped consumption to grow by 18.5 percent from a year ago while expecting investment growth to drop steadily to about 21 percent due to government's support to the private sector and strategic emerging industries.
Increasing labor costs, resources and food prices are expected to push up the consumer prices, but the growth is likely to be restrained in the second half due to the slowing money supply, according to the report.
China's gross domestic product expanded 11.1 percent in the first six months of this year from the previous year, data made available from the National Bureau of Statistics showed.
China's consumer price index stood at 2.6 percent in the first half of 2010, while retail sales and fixed asset investments grew 18.2 percent and 25 percent year on year, respectively.
China would maintain a stable monetary policy, the report said, for the rest of the year since the global economic condition remained complicated. The bank also ruled out the possibility of an interest rate hike.
The bank estimated that new loans for the entire year would stand between 7 trillion yuan (US$1.03 trillion) to 8 trillion yuan.
The Bank of Communications also suggested that the Chinese government was likely to remain tough on the property sector, but there is little possibility of additional curbs on the market.
Property investments would largely fall, but it also ruled out any significant decline in property prices.
Lian suggested that the government should work to keep market liquidity at a reasonable level.
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