Friday, April 13, 2012

China economic growth expected to dip to three-year low

China is expected to report its weakest growth numbers in almost three years later on Friday as global and domestic issues hurt its economy. Analysts have forecast an average annual growth rate of 8.3% for the first quarter, down from 8.9% in the previous three months.

On Thursday, the World Bank warned that China's economy may slow further in the coming months.

"China's gradual slowdown is expected to continue into 2012, as consumption growth slows somewhat, investment growth decelerates more pronouncedly and external demand remains weak," said Ardo Hansson, the World Bank's lead economist for China.

The bank cut its growth outlook for the Chinese economy for 2012 to 8.2% from its earlier projection of 8.4%. It cautioned that a slowdown in Beijing's key export markets and "the ongoing correction in China's property markets" were key risks to growth in the future.

The rise in property and consumer prices in the country has been the focus of China's policymakers over the past few months. The central bank has taken various measures to curb lending in an attempt to control consumer price growth and keep property prices in check.

The rate of inflation, which hit a three-year high of 6.5% in July last year, has since slowed down. Consumer prices in March rose by 3.6% from a year earlier, lower than the government's target of 4% for the year.

At the same time, property prices have fallen for a five consecutive months, easing concerns about the formation of asset bubbles.

However, analysts said that while the government's policies had yielded positive results, authorities needed to ensure that they maintained a balance between sustaining growth and keeping prices in check.


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