1970-01-01 08:33:27
China's economy will probably maintain a double-digit growth this year as well next year. Consumer prices will continue to rise but more slowly, analysts predict.
The government remains under pressure to adopt tighter monetary policies to prevent the economy overheating and control excess cash.
Wang Xiaoguang, an economist with the National Development and Reform Commission, said in a report released yesterday that the nation's gross domestic product may expand 11.5 percent to 24.338 trillion yuan (US$3.251 trillion) this year.
He also said that growth will soar in the first half of 2008, bolstered by an optimistic economic outlook as Beijing hosts the Olympics. The economy may rise over 11 percent in 2008 to surpass 28 trillion yuan.
China reported a 11.9-percent growth in the second quarter, the fastest in 12 years.
But the robust growth was overshadowed by the surge in consumer prices, the main gauge of inflation. China's Consumer Price Index jumped 5.6 percent in July and hit a decade high of 6.5 percent in August, mainly from price hikes for food.
Inflation cooled slightly in September after the central bank raised interest rates and required banks to put aside more money as reserve.
Zhu Zhixin, NDRC's deputy director, said last week the index for consumer prices rose 6.2 percent last month from a year earlier.
For the first eight months, consumer prices rose 3.9 percent compared to a year earlier.
"The growth of consumer prices for the whole year may stand at 4.3 percent. It will outstrip the government's annual target of three percent but still grow within a controllable scope," said Wang.
He also said that the focus of next year's macro price control should be on the run-away real estate sector instead of consumer goods.
Measures should include incentives for people to buy their own homes, while home buying for investment should be brought under rigid control.
He also recommended purchases by foreigners be strictly restricted and a taxation policy for real estate should be drafted as soon as possible.
Ma Jun, an economist with the Deutsche Bank, predicted that the CPI will stabilize in the coming months.
"The daily agriculture wholesale price index has shown a decline recently and an autumn grain harvest will keep the price stable," said Ma.
He expects consumer prices to grow in the range of six to 6.5 percent year on year in October and November, and to slow to five percent in December.
Earlier this month, the Chinese Academy of Social Sciences released a report that estimated China's economy may rise 11.6 percent this year as investment stays strong and consumer prices climb.
China is re-scheduled to release the official third-quarter economic statistics tomorrow morning.
Liang Hong, an economist at Goldman Sachs, expects the central bank may raise the interest rate again this year to further soak up excess liquidity and prevent the economy overheating.
Currently, the benchmark one-year lending rate stands at 7.29 percent after being raised five times this year. The moves went together with eight increases of bank reserve requirements, which are set at 13 percent at the moment.
Source:Shanghai Daily