World Bank fore­casts 6.8% GDP growth

China Daily European Weekly - - China News - By XIN ZHIMING xinzhim­ing@chi­

China’s GDP growth is pro­jected to reach 6.8 per­cent this year, sup­ported by ris­ing house­hold in­comes and im­prov­ing ex­ter­nal de­mand, the World Bank said in its lat­est eco­nomic up­date, re­leased on Dec 19.

It is the lat­est fore­cast up­grade by a ma­jor in­ter­na­tional or­ga­ni­za­tion as the world’s sec­ond-largest econ­omy is set to achieve its growth tar­get of around 6.5 per­cent for 2017.

China’s year-on-year GDP growth av­er­aged a higher-than-ex­pected 6.9 per­cent in the first three quar­ters, de­spite its fi­nan­cial reg­u­la­tory tight­en­ing and eco­nomic re­struc­tur­ing mea­sures, the re­port said.

“China has main­tained its growth re­silience and gained re­form mo­men­tum,” John Litwack, World Bank lead econ­o­mist for China, said in the re­port. “The au­thor­i­ties have un­der­taken a host of pol­icy and reg­u­la­tory mea­sures aimed at re­duc­ing macroe­co­nomic im­bal­ances and lim­it­ing fi­nan­cial risks with­out no­table im­pact on growth,” Litwack said, adding that this year has been a “suc­cess­ful” year for China “on many fronts”.

The coun­try has made head­way in con­trol­ling fi­nan­cial risks as it has cut its over­all lever­age lev­els, the World Bank said in its China Eco­nomic Up­date, cit­ing the in­di­ca­tor of growth in to­tal credit to the non­fi­nan­cial sec­tor ra­tio, which de­clined to 14.1 per­cent in the first 11 months of the year, com­pared with 15.9 per­cent in all of 2016.

The re­port came as China held its key Cen­tral Eco­nomic Work Con­fer­ence, which ended on Dec 20. Par­tic­i­pants were ex­pected to set the tone for eco­nomic pol­i­cy­mak­ing for the next year. Delever­ag­ing as part of sup­ply-side struc­tural re­form was ex­pected to be one of the ma­jor top­ics dis­cussed at the high-pro­file meet­ing.

The World Bank sug­gested that China should take ad­van­tage of its solid growth to press ahead with re­forms.

“Fa­vor­able eco­nomic con­di­tions make it a par­tic­u­larly op­por­tune time to fur­ther re­duce macroe­co­nomic vul­ner­a­bil­i­ties and pur­sue re­forms that tar­get ‘ bet­ter qual­ity, more ef­fi­cient, fairer, and more sus­tain­able de­vel­op­ment’, as em­pha­sized by Pres­i­dent Xi Jin­ping dur­ing the 19th Na­tional Congress of the CPC in Oc­to­ber,” said El­itza Mil­eva, a World Bank se­nior econ­o­mist and co-au­thor of the re­port.

The Asian De­vel­op­ment Bank also fore­cast on Dec 13 that China’s GDP growth this year could reach 6.8 per­cent.

In­ter­na­tional or­ga­ni­za­tions have con­tin­u­ally up­graded China’s GDP growth fore­casts this year. In April, the World Bank fore­cast 6.5 per­cent, and in Oc­to­ber it pro­jected 6.7 per­cent.

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