Learn Chinese - ADB: China's GDP growth to hit 11.2%, CPI to top 4% in 2007

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BIZCHINA / Center

ADB: China's GDP growth to hit 11.2%, CPI to top 4% in 2007

(Xinhua)
Updated: 2007-09-17 13:59

Brisk exports, strong investment and buoyant consumption will lift
China's economic growth to 11.2 percent this year, up from an earlier
estimate of 10 percent, with the inflation rate breaking 4 percent, says
an Asian Development Bank (ADB) report released?in Beijing?on Monday.

"The faster than expected growth momentum built up this year is expected
to carry into 2008," said Zhuang Jian, senior economist of ADB's China
Resident Mission, at a news conference.

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?ADB: China should avoid drastic policies to curb growth?Asian economy to
attain 8.3% growth this year: ADB

The new ADB report also forecasts that China's GDP growth in 2008 will
reach 10.8 percent, revising from the 9.8 percent in an ADB report
published in March.

Zhuang said China's economy grew at a faster-than-expected 11.5 percent
in the first half of 2007, which is the highest rate since 1994.

According to Zhuang, China's fast economic growth was led by industry,
especially in such sectors as steel, electricity, chemicals, and oil
processing.

Strong profitability, buoyant sales and still-low lending rates also
drove investment during the period.

The ADB report said investment administered by local governments grew by
28.1 percent in the first six months, nearly doubling the equivalent
central government rate.

China's inflation barometer - the Consumer Price Index (CPI) is estimated
to hit 4.2 percent this year and 3.8 percent in 2008 as against the
previous forecasts of 1.8 percent and 2.2 percent respectively, according
to the ADB report.

Zhuang said rising global grain prices and a pig disease outbreak led to
rocketing food prices, but this is expected to ease next year, paving the
way for the implementation of planned reforms in the pricing of
state-controlled sectors such as water, power and natural gas.

Significantly higher than expected inflation, however, poses a risk to
the outlook. Zhuang said adverse weather would lower domestic grain
production at a time when imported grain prices are high.

(For more biz stories, please visit Industry Updates)

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