The World Bank Predicted China's GDP Growth Rate Next Year Will Be 7.5%

BEIJING, Nov. 26 -- The World Bank yesterday released the latest issue of "China Quarterly Update", and predicted that China GDP growth next year will be around 7.5%, and said that the programs Chinese government has launched to stimulate the economy is the key to maintain economic growth momentum next year. International Monetary Fund (IMF) released "Asia-Pacific Regional Economic Outlook report" in November on Monday and predicted China next year GDP growth rate will be down to 8.5% from 9.7%

    The report said that over the past year, the impact of the international financial crisis and turmoil on the Chinese economy can be controlled overall. Declines in economic growth rate from a high in 2007 mainly due to the weakening of domestic demand, in addition to the tightening macroeconomic policy this year, soft demand in the housing market and its impact on the "upstream" Industry is also the root. As a result, the report believed that China's private investment will be on downward track under the detrimental external situation and the pressure of the sluggish real estate market.

    In addition, the report also believed that exports changes will be sensitive part in China's overall economic growth. As the risk aversion sentiment and lead to leverage triggered by the global financial crisis resulted in monetary tightening, the demand in emerging economies which accounted for 50% of Chinese exports declined, and China's exports in 2009 will continue to be weak. However, the global trade market shrink for the first time since 1982, China's market share may continue to increase.

    World Bank China Bureau Secretary David (David Dollar) said that in the above-mentioned situation, Chinese government's introduction of an expansionary macroeconomic policy is correct and timely decision, and will take effect in the short term. World Bank senior economist Louis (Louis Kuijs) said the World Bank predicted China's GDP growth next year will be 7.5%, among them more than half will come from the government-led expenditure; meanwhile, due to reduced inflationary pressures, Chinese government may still introduce relevant policy before March next year, and more government policy to stimulate economic growth will play a key role in 2009.

    International Monetary Fund (IMF) has also expressed this view " Asia-Pacific Regional Economic Outlook report" released this week. The report said most Asian countries can relax monetary policy if necessary and can take further fiscal measures to stimulate the economy to help speed up Asia's economic recovery at the end of next year. The report adjusted China's GDP growth next year from 9.7% they predicted before to 8.5%.

    (Edited by CBI China)