China growth seen slower in 2012, recovery mild: World Bank
Beijing - The World Bank cut its forecast for China?s 2012 economic growth to 8.2 per cent yesterday and said a rebound might not begin before the third quarter of the year as slack foreign demand and a governmentinduced real estate slowdown restrain a recovery.
?There is the potential for growth to be bumping along the bottom for longer,? Ardo Hansson, the World Bank?s lead economist for China, told a news conference to release the multilateral lender?s quarterly update on China. The Bank?s new growth forecast for the world?s second- biggest economy would mark a 13-year low, compared with an 8.4 per cent, 11-year-low estimate in November 2011.
An 8.2 per cent expansion would mean China?s economy was growing slightly below its potential rate, Hansson said. In economic terms, it implies Beijing has space to tweak policies to boost growth without igniting inflation. ?We see cyclical weakness continuing, but that the prospects for a soft landing remain high,? Hansson said, adding that Beijing had considerable fiscal resources available to help bolster the economy if risks to the downside accelerate.
The Bank?s economics team believes that when recovery does come, most likely by the middle of the year, but possibly not before the third quarter, its shape would be somewhere between a vigorous ?V? and a flat ?L?.
Though the report characterises the bounce as mild, it is faster than expected in November, when 2013 growth was estimated at 8.4 per cent compared with 8.6 per cent in the latest report.
The World Bank forecast China?s export growth at 9.7 per cent this year and 11.6 per cent in the next, with import growth likely at 12 per cent in 2012 and 12.5 per cent in 2013.
That outcome would see external demand having a negative contribution to growth for a second successive year, with trade subtracting 0.3 per cent from GDP in 2012 and adding nothing at all in 2013, according to the Bank?s forecasts.
REAL ESTATE RISKS
While risks to overseas demand for goods from China?s vast factory sector were seen as a key external restraint on growth in the near term, the bigger problem was domestic real estate.
The report welcomed the gradual cooling of a sector that had been in the grip of a speculative frenzy before the government unveiled a slew of policies to calm it two years ago. But it cautioned that downside risks were centred on that adjustment.
?Given the significance of the sector in the overall economy, continued vigilance will be required to contain negative spill over effects,? the report said. ?A more amplified downturn could have negative economy- wide impacts.?
Real estate investment made up about 13 per cent of China?s GDP in 2011 and directly affects about 40 different industries.
Premier Wen Jiabao has pledged to keep the curbs until home prices return to what he says is a reasonable level. Prices in major cities have fallen for five straight months, but remain elevated after rising 10-fold in the past decade.
China?s average home prices will probably fall between 10 and 20 per cent this year, a pace modest enough to prevent a hard landing of the economy, according to a Reuters poll in January.
? Nampa/Reuters
?There is the potential for growth to be bumping along the bottom for longer,? Ardo Hansson, the World Bank?s lead economist for China, told a news conference to release the multilateral lender?s quarterly update on China. The Bank?s new growth forecast for the world?s second- biggest economy would mark a 13-year low, compared with an 8.4 per cent, 11-year-low estimate in November 2011.
An 8.2 per cent expansion would mean China?s economy was growing slightly below its potential rate, Hansson said. In economic terms, it implies Beijing has space to tweak policies to boost growth without igniting inflation. ?We see cyclical weakness continuing, but that the prospects for a soft landing remain high,? Hansson said, adding that Beijing had considerable fiscal resources available to help bolster the economy if risks to the downside accelerate.
The Bank?s economics team believes that when recovery does come, most likely by the middle of the year, but possibly not before the third quarter, its shape would be somewhere between a vigorous ?V? and a flat ?L?.
Though the report characterises the bounce as mild, it is faster than expected in November, when 2013 growth was estimated at 8.4 per cent compared with 8.6 per cent in the latest report.
The World Bank forecast China?s export growth at 9.7 per cent this year and 11.6 per cent in the next, with import growth likely at 12 per cent in 2012 and 12.5 per cent in 2013.
That outcome would see external demand having a negative contribution to growth for a second successive year, with trade subtracting 0.3 per cent from GDP in 2012 and adding nothing at all in 2013, according to the Bank?s forecasts.
REAL ESTATE RISKS
While risks to overseas demand for goods from China?s vast factory sector were seen as a key external restraint on growth in the near term, the bigger problem was domestic real estate.
The report welcomed the gradual cooling of a sector that had been in the grip of a speculative frenzy before the government unveiled a slew of policies to calm it two years ago. But it cautioned that downside risks were centred on that adjustment.
?Given the significance of the sector in the overall economy, continued vigilance will be required to contain negative spill over effects,? the report said. ?A more amplified downturn could have negative economy- wide impacts.?
Real estate investment made up about 13 per cent of China?s GDP in 2011 and directly affects about 40 different industries.
Premier Wen Jiabao has pledged to keep the curbs until home prices return to what he says is a reasonable level. Prices in major cities have fallen for five straight months, but remain elevated after rising 10-fold in the past decade.
China?s average home prices will probably fall between 10 and 20 per cent this year, a pace modest enough to prevent a hard landing of the economy, according to a Reuters poll in January.
? Nampa/Reuters
Kommentaar
Republikein
Geen kommentaar is op hierdie artikel gelaat nie