Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)
http://www.shanghaidaily.com/art/2005/11/04/210383/WB raises growth forecast for China's GDP.htm
WB raises growth forecast for China's GDP
Created: 2005-11-04 CST, Updated: 2005-11-04 CST
THE World Bank bumped up its optimism on China's economy yesterday, raising its growth projections for this year to 9.3 percent from 9 percent, citing a surge in domestic demand.
The latest recalculation was the third time this year that the 184-member bank lifted its growth forecast for China, following predictions of 9 percent in August and 8.3 percent in April.
"China's economic growth in the third quarter of 2005 has been higher than expected, at least in part due to more rapid domestic demand," the bank's report said, predicting that the upswing would help shrink the country's huge trade surplus.
Last month, the Chinese government said gross domestic product expanded by 9.4 percent in the first nine months of 2005 compared with the same period last year.
China's blistering economic performance will likely continue next year, the bank projected, raising its growth forecast for 2006 to 8.7 percent, up from its earlier target of 7.9 percent.
The bank said inflation should stay low, though it gave no target.
China reported last month that consumer prices rose 2 percent during the first nine months of the year, down from 4.1 percent during the same period a year ago.
Increased consumer spending should help rein in the country's current account surplus — the broadest measure of trade that includes merchandise and investment flows, the bank said, without giving specific predictions.
The government said this week that China's current-account surplus totaled US$67 billion in the first half of this year, up nine times from the US$7.5 billion reported in the same period last year.
In its report, the World Bank, whose stated mission is to fight poverty and promote economic development, echoed Chinese government warnings against allowing faster growth in credit.
Chinese leaders say excessive investment in unneeded factories, shopping malls and other assets could fuel inflation or cause financial problems for banks if borrowers default.
The government has tried to rein in investment by tightening lending standards and ordering local authorities to block unneeded building projects.
"Indeed, investment is likely to continue to grow faster than consumption into 2006, and new policy measures may be required to dampen investment," the World Bank report said.
The latest recalculation was the third time this year that the 184-member bank lifted its growth forecast for China, following predictions of 9 percent in August and 8.3 percent in April.
"China's economic growth in the third quarter of 2005 has been higher than expected, at least in part due to more rapid domestic demand," the bank's report said, predicting that the upswing would help shrink the country's huge trade surplus.
Last month, the Chinese government said gross domestic product expanded by 9.4 percent in the first nine months of 2005 compared with the same period last year.
China's blistering economic performance will likely continue next year, the bank projected, raising its growth forecast for 2006 to 8.7 percent, up from its earlier target of 7.9 percent.
The bank said inflation should stay low, though it gave no target.
China reported last month that consumer prices rose 2 percent during the first nine months of the year, down from 4.1 percent during the same period a year ago.
Increased consumer spending should help rein in the country's current account surplus — the broadest measure of trade that includes merchandise and investment flows, the bank said, without giving specific predictions.
The government said this week that China's current-account surplus totaled US$67 billion in the first half of this year, up nine times from the US$7.5 billion reported in the same period last year.
In its report, the World Bank, whose stated mission is to fight poverty and promote economic development, echoed Chinese government warnings against allowing faster growth in credit.
Chinese leaders say excessive investment in unneeded factories, shopping malls and other assets could fuel inflation or cause financial problems for banks if borrowers default.
The government has tried to rein in investment by tightening lending standards and ordering local authorities to block unneeded building projects.
"Indeed, investment is likely to continue to grow faster than consumption into 2006, and new policy measures may be required to dampen investment," the World Bank report said.
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