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| ADB raises growth forecast |
| News Archive - Environmental, New & Alternative Energy - April news | |
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The Asian Development Bank yesterday raised its forecast for China's economic growth this year to 9.5 per cent from an earlier estimate of 8.8 per cent. The bank, which did not give a reason for the increase, said the rate of economic growth will cool to about 9 per cent a year over the next five years due to the government's measures to balance investment and consumption. The bank's latest prediction for China's economic growth, published in its Asian Development Outlook 2006, was higher than the 9.3 per cent predicted by the State Information Centre, a research arm of the National Development and Reform Commission. Zhuang Jian, a senior economist with the bank, said fixed-asset investment will continue to be the main driver of growth this year and next, despite the government's increasing efforts to spur consumption. "Measures aimed at increasing private and government consumption are unlikely to significantly reorient the structure and sources of growth in the short run," he said. Earlier figures from the National Bureau of Statistics indicated that China's urban fixed-asset investment rose 26.6 per cent year-on-year during the first two months of this year to reach 529.4 billion yuan (US$65.4 billion). Zhuang said the fast growth was mainly because the government did not carry out new tightening measures because of increasing worries about an economic slowdown. "The government needs a proper growth (of fixed-asset investment) to maintain the country's economic expansion," he said. Zhuang pointed out that the country's consumer price index, which stood at 1.4 per cent during the first two months, will reach 2-3 per cent later this year. Price rises for resource-related products, such as water and electricity, are expected in the coming months. This will drive up overall price levels, although prices for a majority of the country's industrial products will fall because of an oversupply. According to the Asian Development Outlook 2006, agriculture is expected to grow by 5-5.3 per cent this year, supported by higher levels of infrastructure investment and other targeted measures. Industrial growth will slow to 9-10 per cent from about 11 per cent in the past two years, as a consequence of significant oversupply in some sectors, moderation of investment growth and deceleration in export growth, it said. The service sector is expected to rise by 9.5 per cent this year, aided by the government's efforts to promote private consumption and services, it said. |
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