By Wang Yanlin | 2012-10-10 | NEWSPAPER EDITION
CHINA'S economy may remain weak in September due to sluggish domestic and overseas demand while growth in its third-quarter gross domestic product may be lower than expected, according to analysts.
However, the inflation may ease again after August's acceleration, leaving more room for policy adjustment, they said ahead of the release of economic data next week.
"It is hard to say when China's economic recovery will be in sight," said Lu Zhengwei, chief economist at the Industrial Bank. "We expected the economy to stabilize in the third quarter, but the weak performance in the past few months has dashed our expectations."
He predicted industrial production in September to expand 8.7 percent year on year, weakening further from August's 8.9 percent. Fixed-asset investment may rise 20 percent, slower than 20.2 percent a month earlier.
China's gross domestic product grew 7.6 percent from a year earlier in the second quarter, the slowest in three years. Some economists projected the third-quarter growth would be as low as 7.3 percent.
UBS economist Wang Tao also said the September data will indicate that demand continued to be weak and recovery has yet to happen.
"But on the upside, we expect to see a faster pace of credit and social financing growth, a continued rebound in property sales and accelerated infrastructure investment," Wang said.
Tang Jianwei, an analyst at the Bank of Communications, said the moderating inflation will be good news.
"Although the third round of quantitative easing in the United States raised the possibility of higher imported inflation, the growth of consumer prices is likely to decelerate in September due to falling vegetable costs and dwindling domestic demand," Tang said.
He forecast the Consumer Price Index, the main gauge of inflation, to rise 1.8 percent year on year in September, down from 2 percent in August.