CICC lifts China’s 2018 growth forecast to 7%
Print Edition
A leading Chinese investment firm raised its forecast for China’s economic growth in 2018, citing stronger external demand and strength in consumption and manufacturing investment.
China International Capital Corp raised its forecast for China’s 2018 gross domestic product growth to 7 percent year on year, up from a previous estimate of 6.9 percent, said a report from the company.
An expected tax cut in the United States will boost external demand for China, contributing to faster export growth, according to Liang Hong, chief economist at CICC.
Stronger-than-expected external demand growth in 2018 will add to the inflationary pressure, and the consumer price index is predicted to rise 2.6 percent year on year in 2018, up from 2.5 percent in the previous estimate, according to the report.
CICC is also optimistic about China’s domestic demand, citing growth potential in consumption and investment.
“Consumption growth will likely pick up on the back of rising disposable income growth, especially that of lower-income households that have higher consumption propensity,” Liang said.
Meanwhile, manufacturing investment growth is expected to accelerate, driven by a notable rebound of corporate investment returns, Liang said.
CICC also expected acceleration in property investment growth and resilience in actual infrastructure investment activity this year.
For 2019, CICC expected the real GDP growth to remain robust at 6.9 percent.
With higher hopes for growth and inflation, CICC forecast that China’s central bank will raise the benchmark deposit and lending rate by 25 basis points this year.
China’s GDP grew 6.9 percent year on year in the first three quarters, above the government’s yearly target of 6.5 percent. The official GDP figure for 2017 is set to be released next week.
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