China will achieve 8.5% GDP growth in Q3 – state agency

21 August 2009 14:42  [Source: ICIS news]

SHANGHAI (ICIS news)--China’s third-quarter GDP will grow by 8.5% year on year, mainly due to increased investment and improved demand from overseas amid the country’s fiscal stimulus packages and “moderately loose” monetary policy, according to a government report released on Friday.

China’s GDP grew by 7.9% year on year in the second quarter after reaching a 10-year low of 6.1% in the first quarter.

Investment would become the most significant contributor to third-quarter GDP growth, surpassing both consumption and net exports, said the State Information Center (SIC) report, which was posted in China Securities Journal.

The real estate sector would be a major factor behind the investment growth, said the SIC, adding that urban fixed-asset investment in the third quarter would rise by around 32% year on year.

China’s consumption would remain stable, but retail sales of social consumption goods would be up by 15% year on year, the report said.

Export and import declines in the third quarter would slow down due to the better-than-expected economic situation of major trading partners including the US.

China’s exports were expected to be down by 20% year on year, while imports would fall by 13%, the SIC said.

The country’s industrial output in the third quarter would rise by 11% in line with heavy-industry output growth.

China’s consumer price index (CPI) would drop by 1.3% year on year, while its producer price index (PPI) would be down 7.9%, the lowest figures of the year so far, the SIC said.

The report emphasised that the government should continue to implement its “moderately loose” monetary policies in the second half of this year.

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By: Judith Wang
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