China's economic growth to slow to 8.2% in 2012 - World Bank

12 April 2012 07:40  [Source: ICIS news]

SINGAPORE (ICIS)--China’s economic growth is expected to moderate to 8.2% this year, after expanding by 9.2% year on year in 2011, weighed by a weaker global economic environment and tighter domestic policies, the World Bank said on Thursday.

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 the bank’s lead economist for China Ardo Hansson.

“The risks of overheating are moderating, increasing the prospects to achieve a soft landing,” Hansson added. 

The bank projects that China’s economy will grow by 8.6% year on year in 2013.

“The current episode of cyclical weakness shows the limits of China’s export, credit and investment-led growth model,” said Philip Schellekens, a senior economist at the World Bank.

Meanwhile, China’s current account surplus will increase from 2.8% of GDP in 2011 to 3% in 2012 and 3.3% in 2013, the bank said.

“While our central projection remains for a gradual slowdown, downside risks remain elevated and [will] center on the strength of the recovery in high-income countries and the ongoing adjustment in domestic property markets,” the bank said.

“The overriding policy challenge for the near term is to facilitate a soft landing. While the prospects for such an outcome remain high, there is concern is that growth slows too quickly,” it added.

Fresh economic data from China will be released this Friday, with industrial production, fixed asset investment, GDP and retail sales data all likely to moderate, according to Singapore-based UOB Economic-Treasury Research.

China’s GDP could show a slower rate of growth of 8.4% for the first quarter of 2012, it added.

The country’s economy expanded by 8.9% year on year in the fourth quarter of 2011.

By: Nurluqman Suratman

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