China's growth may slip to 13-year low in 2012: World Bank
12 Apr 2012
China's economic growth may slip to a 13-year low in 2012 with sluggish recovery hurting export demand, and domestic investment and consumption growth slowing, according to the World Bank's latest forecast.
The Washington-based lender slashed its estimate for China's expansion this year to 8.2 per cent in a report released today in Beijing from a January projection of 8.4 per cent.
The world's second-largest economy lost momentum in the first quarter, as a report by the statistics bureau tomorrow would show expansion was the least in around three years, a Bloomberg News survey said. The slowdown underlines the risks to the global recovery after the US reported March job growth that fell short of estimates and concern grew that Europe's sovereign debt crisis was worsening.
''With the economy slowing in the near term, the policy challenge is to ensure that this continues in a gradual fashion,'' the World Bank said. ''Sufficient policy space exists to facilitate an orderly adjustment and respond to downside risks if they were to materialise.''
This month premier Wen Jiabao pledged to boost infrastructure investment, ensure ''reasonable'' liquidity and accelerate payments of export rebates even as demand both domestic and overseas demand slowed last quarter. The central bank has cut banks' reserve ratios twice since November and, according to a Bloomberg survey last month economists forecast more reductions this year.
According to the World Bank, the government should increase fiscal spending to spur consumption and lower banks' reserve requirements to ease credit.
