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ADB cuts China’s growth outlook to 6.8%
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THE Asian Development Bank yesterday cut its forecast of China’s 2015 economic growth to 6.8 percent from the previous 7.2 percent made in March.
The ADB, however, said China’s exports and consumption will pick up in the coming months to offset the economic slowdown in the third quarter.
China’s economy decelerated more than expected in the first eight months of this year.
The ADB also revised down its forecast for the country’s economic growth in 2016 to 6.7 percent from 7 percent, the bank said in its latest flagship annual economic publication, Asian Development Outlook 2015, released yesterday.
“In addition to less favorable demographics and higher wage costs, China’s adjustment to a new growth model that is based more on innovation, consumption and services will bring with it more moderate growth,” said Shang-Jin Wei, chief economist at ADB.
“As long as the country continues to pursue pro-market reforms, there is a good chance for it to realize productivity gains and relatively strong future growth rates.”
On Monday, the Chinese Academy of Social Sciences, China’s top think tank, also released a report that predicted the country’s gross domestic product to expand 6.9 percent from a year earlier in 2015, slowing from 7.3 percent last year but largely in line with the official full-year target of around 7 percent.
China’s economy grew 7 percent in the first half of this year, better than the previous market hopes of a 6.8 percent rise.
But data in the past three months, including trade, manufacturing, and fixed-asset investment, all eased, casting a shadow over the economic outlook for the rest of the year.
To bolster the economy, the People’s Bank of China last month cut interest rates for the fifth time since November, as well as bank reserve requirement ratios.
The ADB report pointed out that China’s labor market was healthy, with 7.2 million new urban jobs created in the first half of the year.
China aims for consumption to power economic growth and to rely less on exports and investment.
“Consumption remains robust, contributing 4.2 percentage points to GDP growth in the first half, while a recent uptick in money supply growth will also support the economy,” the report said.
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