Economy

WB predicts 9.5% growth for Chinese economy

(Xinhua)
Updated: 2010-06-18 14:55

BEIJING: The World Bank (WB) said Friday it continues to forecast Chinese economic growth of 9.5 percent in 2010 but warned growth is likely to ease because of the partial normalization of macro policy and measures to cool the property market.

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Leading indicators and industrial production data suggests China's economic growth will moderate in the second quarter of the year, although it will still be a strong growth, the WB said in China Quarterly Update, a regular assessment of the Chinese economy, released Friday.

China's gross domestic product (GDP) jumped 11.9 percent year-on-year in the first quarter of the year, up from 10.7 percent in the last quarter of 2009.

But the report said there were still uncertainties concerning China's economic growth, including a declining trade surplus, rising inflation and soaring property prices.

The WB forecasts Chinese GDP growth of 8.5 percent in 2011.

The bank remains upbeat about China's growth prospects.

A slowdown in government-led investment after China's massive stimulus package last year has been partly offset by strong investment in the real estate sector, the report said, adding that growth in household consumption has held up well.

"Growth should be less investment-driven this year and benefit from more favorable external trade, while consumption is likely to remain supported by a strong labor market," said Ardo Hansson, the World Bank's chief economist for China.

In April, the bank revised its 2010 growth forecast for the Chinese economy to 9.5 percent, up from the previous forecast of 8.7 percent.