ADB: China's economy to grow 10% in 2007
(Xinhua)Updated: 2007-03-27 13:46
TOKYO -- China's economy growth in the coming two years will moderate but still remain high, Asian Development Bank (ADB) says in a major report released Tuesday.
"A gradual tightening in monetary policy and the use of administrative tools moderated investment growth in the second half of 2006," said Ifzal Ali, ADB's Chief Economist, "In 2007 and 2008, softer external demand and policy curbs are expected to pull growth down gradually."
The report said that over the medium term (2007-2011), China's growth in GDP is expected to average about 9 percent. Inflation during this period will be higher than now, but probably lower than 3 percent on average.
In the medium and long-term, the aim for China is to achieve a more balanced and inclusive economy, less dependent on exports, investment and industry, and more on private consumption and services, it said.
Under measures to curb energy use and pollution, and property speculation, investment growth in China is likely to be at 20 percent in 2007, down from 24 percent in 2006.
"The government is actively pursuing to cool down the property market," Ali said when asked about China's real estate market. "To a certain extent, the market has shown signs of cooling down since later half of 2006." He noted that the market tendency will depend on policies on foreign reserves, interest rates and foreign exchange rates.
According to the outlook report, industrial growth in China is projected to slow to 11 percent in 2007 and 10.8 percent in 2008. Agriculture is expected to benefit from a new official emphasis on rural development under China's 11th Five-Year Plan. Agricultural production is projected to increase by 5.2 percent to 5.4 percent in the next two years.
Services in China are expected to grow by 10.4 percent to 10.5 percent in the next two years, against a 10.3 percent growth in 2006, supported by the Chinese government's efforts to promote consumption as well as expenditures related with hosting the 2008 Olympics.
The outlook report analyzes the recent economic performance of over 40 developing member countries and provides forecasts for key macroeconomic indicators the next two years. It predicts a 7.6 percent and 7.7 percent for the region on average in 2007 and 2008 respectively.
ADB, established in 1966, is a multilateral development bank based in Manila. It is dedicated to reducing poverty in the Asia and Pacific region and consists of 67 members, 48 of which are from the region. China joined the ADB in 1986.
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