1970-01-01 08:33:28
The Asian Development Bank (ADB) said on Tuesday that China's economic growth would moderate to 10 percent this year from 11.9 percent in 2007 and ease further to 9.5 percent in 2009.
The forecast in the bank's half-year report -- the Asian Development Outlook 2008 Update -- was the first from the ADB for China's economic growth since the catastrophic earthquake in May.
The report said despite the forecast deceleration, China remained among the world's fastest-growing economies.
The forecast for 2008 was unchanged from April, but the growth figure for 2009 was lowered from 9.8 percent.
If zal Ali, chief economist of the Manila-based development bank, said the growth rate forecast was maintained on the assumption that private consumption would remain robust as incomes generally outpaced inflation
"Growth of 9.5 percent in 2009, as we have forecast, would bring the economy back to its long-run sustainable growth range of9 to 10 percent, easing the strains on energy, inflation and the environment," said Ali.
The report noted that China's private consumption was strong, despite accelerating price pressures.
Zhuang Jian, a senior economist with the ADB mission in China, said that retail sales grew 22.2 percent in nominal terms during the second quarter. "While higher prices accounted for part of this increase, real incomes continued to grow, underpinning rising consumption."
Zhuang said higher government spending on social security, education and health care might also be encouraging households to spend more, as their need to save for these services diminished.
The report also warned of the risks of a sharper than expected slowdown in exports and double-digit inflation.
The bank revised its prediction for China's annual inflation rate to 7 percent for 2008, up from the forecast of 5.5 percent in April.
Source:Xinhuanet