BEIJING:
China's economic growth will fall to 8.2
per cent this year due to slowing domestic consumption and weak external
demand, before rebounding in 2013, the World Bank forecast on Thursday.
The
figure represents a cut in the bank's growth forecast for China after it
predicted in January that gross domestic product in the world's second biggest
economy would expand 8.4 per cent this year.
"The
policy challenge for the near term is to sustain growth through soft landing,"
the bank said in its China Quarterly Update, which forecast growth of 8.6 per
cent next year.
"While
the prospects for a soft landing remain high, there are concerns that growth
slows too quickly."
China's
growth slowed to 9.2 per cent last year from 10.4 per cent in 2010, dragged
down by the global slowdown and domestic tightening aimed at controlling
inflation.
Beijing
has since pledged to "fine-tune" policy to prevent a hard landing for
the economy, which could trigger widespread job losses and spark social unrest.
"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
risks of overheating are moderating, increasing the prospects to achieve a soft
landing."
The
World Bank report forecast inflation would fall to 3.2 per cent in 2012, below
the government's target of around four per cent.
It said
reserve requirements could be tweaked further to ease the availability of
credit, but "policy rate action should be reserved for potential downside
scenarios."
China's
central bank in February cut the amount of cash banks must hold in reserve for the
second time in three months as policymakers moved to increase lending and boost
domestic consumption.
The
World Bank report came a day before the government is due to release key
economic indicators for the first quarter of 2012 expected to show growth
slowed slightly from the same period in 2011.
-
AFP/wm
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