China’s economy is weathering the global slowdown better than expected, the World Bank said yesterday as it raised its growth forecast for the Asian giant to 9.8 percent from 9.4 percent.
The World Bank cited the country’s strong domestic demand and sustained competitiveness in exports as key strengths.
“Amid weaker and uncertain global prospects, China’s growth will be supported by strong international competitiveness and a robust domestic economy,” David Dollar, World Bank country director for China, said in Beijing.
Just two months earlier, the World Bank lowered its growth estimate for China to 9.4 percent from 9.6 percent on weakening demand for its exports.
The back-and-forth revisions reflect the uncertainties prevailing at a time when the US economic outlook remains murky because of the fallout from the mortgage lending crisis. They also result from a revision in China’s own GDP growth estimate for last year, which was raised by 0.5 percentage points following the bank’s most recent twice-yearly report in early April.
Despite the upbeat overall message, the quarterly report did note that China’s growth is moderating as investment in factories, construction and other fixed assets slows.
The World Bank’s current forecast is for growth to slow to 9.2 percent next year.
The Chinese government has set a growth target for this year of 8 percent following last year’s sizzling 11.9 percent expansion.
The Washington-based bank said it did not expect the calamitous earthquake that struck central China last month to have a significant impact on the national economy. The bank said reconstruction might actually boost growth in the months ahead.
The bank lauded China’s progress in combating inflation, which fell to 7.7 percent last month from 8.5 percent in April. It forecast that the consumer price index would rise 6 percent this year.
The report said the gradual strengthening of the yuan can help reduce inflationary pressures by boosting China’s purchasing power at a time of surging prices for crude oil and other crucial commodities.
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