Beijing, Sep 17 (Xinhua) Brisk exports, strong investments and buoyant consumption will lift economic growth in China to 11.2 percent this year, up from an earlier estimate of 10 percent, says an Asian Development Bank (ADB) report released here Monday.
China’s inflation barometer, the Consumer Price Index (CPI), is estimated to be 4.2 percent this year and 3.8 percent in 2008 against the previous forecasts of 1.8 percent and 2.2 percent, respectively, said the ADB report.
“The faster than expected growth momentum built up this year is expected to carry into 2008,” Zhuang Jian, senior economist of ADB’s China Resident Mission, at a press conference in Beijing.
The new ADB report also forecasts that China’s GDP growth in 2008 will reach 10.8 percent, an upward revision from 9.8 percent projection in March when ADB launched the flagship annual forecasting publication.
According to Zhuang, China’s economy was led by the industry, especially in sectors as steel, electricity, chemicals, and oil processing, resulting in a faster-than-expected 11.5 percent growth in the first half of 2007.
The ADB report also forecasts that China’s exports will grow by 20 percent and imports by 16 percent in the second half of 2007, resulting in a full-year trade surplus of around $300 billion, up more than 60 percent from 2006.
Zhuang said rising global grain prices and the outbreak of blue ear pig disease led to higher food prices, but this is expected to ease next year, paving the way for implementation of planned reforms in state-controlled sectors such as water, power and natural gas.
The gap between export and import growth will probably narrow as the changes to export tariffs and export tax rebates take effect, said Zhuang.
The ADB reports forecasts that higher than expected inflation and the country’s continued reliance on exports and investments for growth instead of private consumption could be the major challenges in the future.