Economy to maintain robust growth
(Reuters)Updated: 2006-12-26 19:27
SHANGHAI/BEIJING - China's economy is expected to maintain robust, relatively inflation-free growth next year, a state think-tank and central bank officials said on Tuesday.
The body, which is part of the National Development and Reform Commission, the top economic planning agency, said that it expected gross domestic product to grow within a range of 8.5 percent to 10.5 percent next year.
"If the economy maintains a steady but fast growth, GDP growth should be at about 9.5 percent," said the report published in the Shanghai Securities News.
The economy is on track to record its fourth straight year of double-digit growth in 2006, but many economists expect it to slow modestly in 2007.
Separately, assistant central bank governor Yi Gang told a forum that he expected consumer inflation to remain steady at within 3 percent next year, as a good grain harvest this year meant pressure on food prices would be limited.
Annual consumer price inflation has remained at below 2 percent all of this year, but it jumped to 1.9 percent in November from 1.4 percent in October largely because of rapid growth in food prices.
PRICE RISES SEEN SHORT-LIVED
Tang Xu, head of the People's Bank of China's research department, told the same forum that recent price rises for agricultural products were of no large concern and could actually be beneficial to farmers.
"It will probably be a short-lived phenomenon. We will keep an eye on that. But it's unlikely the central bank will take any measures," he said, adding that he expected CPI inflation to stay at around 2 percent next year.
Tang's department initially made that forecast for inflation in a research report published earlier this month; it projected GDP growth of 9.8 percent in 2007.
The State Information Center said in its report on Tuesday that it saw annual growth in fixed-asset investment slowing to around 20 percent in 2007 due to recent government measures to rein in runaway capital spending, which peaked at 31.3 percent annual growth in the first half.
The think-tank said that consumer prices would probably rise 2 percent next year, as retail sales expanded by about 12.5 percent.
Imports and exports would slow, but the trade surplus would expand to around $180 billion, it said. Export growth would fall 10 percentage points to about 15 percent partly on further yuan appreciation and lower export tax rebates, it added.
Annual growth in China's broad M2 money supply -- which slowed in November to 16.8 percent from 17.1 percent in October -- should reach 16 percent next year, it said.
The domestic A-share market, which has almost doubled its value in 2006, would gain a further 20-30 percent next year, said the report, jointly prepared by the Shanghai Securities News.
It added that the yuan might appreciate a further 3 to 4 percent next year. The yuan has gained 3.7 percent since it was revalued by 2.1 percent to 8.11 per dollar on July 21, 2005, and freed from a dollar peg to float within managed bands.
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