By Xinhua,
Manila : China’s economy will grow moderately this year and in the next but it will still remain one of the world’s fastest growing economies, the Asian Development Bank (ADB) said Tuesday.
In a report, the ADB projected a 10 percent growth this year that will further ease to 9.5 percent in 2009.
The cool down is a result of the combining effects of a reduced trade surplus, slower growth in investment and the global economic downturn, the report entitled Asian Development Outlook 2008 Update said.
China’s Gross Domestic Product (GDP) grew 11.4 percent year-on-year with the risks of spiraling inflation and economic overheating rising. For the first half of 2008, the economy grew at a reduced pace of 10.4 percent.
“Weak external demand and the impact of tightening of monetary policy trimmed economic expansion to a still-rapid 10.4 percent in the first half of this year,” said ADB chief economist Ifzal Ali.
Ali said a growth rate of 9.5 percent in 2009 would bring the economy back to its long-run sustainable growth range of 9-10 percent, easing the strains on energy, inflation, and the environment.
ADB said it has also revised the inflation projection for the whole of 2008 from 5.5 percent to 7 percent on the back of high food prices.
For 2009, the inflation is likely to hit 5.5 percent, instead of 5 percent projected in April.
Price increases for fuel and electricity are anticipated, which will lead to higher production costs that may be passed onto consumers, the report said.