China think tank fore­casts Q1 growth at 6.7pc

The Pak Banker - - 6BUSINESS -

China's eco­nomic growth will re­main sub­dued in the first quar­ter of 2016, ex­pand­ing by around 6.7 per­cent be­fore grad­u­ally sta­bi­liz­ing in the sec­ond quar­ter, a gov­ern­ment think tank forecast on Mon­day.

The pre­dicted growth would be a fur­ther slow­down from the 6.8-per­cent ex­pan­sion seen in the pre­vi­ous quar­ter, due to slower in­dus­trial pro­duc­tion and in­vest­ments, and weak con­sump­tion and ex­ports, ac­cord­ing to a re­port re­leased by the Na­tional Academy of Eco­nomic Strat­egy.

The in­sti­tu­tion ex­pects con­sumer prices to grow by around 2.2 per­cent in the first three months. How­ever, with gov­ern­ment pro-growth poli­cies grad­u­ally bed­ding in, it's likely that the econ­omy will re­main "on a sta­ble track," the re­port said.

On the back of stronger fis­cal and mone­tary sup­port, the academy forecast growth in the sec­ond quar­ter would pick up at round 6.8 per­cent.

To ar­rest the eco­nomic down­turn, China has cut in­ter­est rates and the re­serve re­quire­ment ra­tio of banks sev­eral times since 2014. As au­thor­i­ties push sup­ply-side struc­tural re­form, the academy ex­pects fur­ther eas­ing to lower fi­nanc­ing costs for the real econ­omy. China's eco­nomic growth rate tar­get has been set at 6.5 to 7 per­cent in 2016, with an av­er­age an­nual growth rate of at least 6.5 per­cent through 2020.

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