GDP growth to hit 10.5 percent this year: IMF

09:39, October 08, 2010      

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China's gross domestic product (GDP) will grow by 10.5 percent in 2010 and 9.6 percent in 2011, ahead of other major economies, according to a report released by the International Monetary Fund (IMF) Wednesday.

GDP measures a nation's overall economic output, incorporating the market value of all final goods and services made within its borders in a one-year period.

The IMF published the projections in its biannual World Economic Outlook. China's GDP growth is the strongest among major world economies including the US, the Euro area and other emerging economies such as India and Brazil.

The IMF projects US GDP growth, the world's largest economy, to come in at 2.6 percent for 2010 and 2.3 percent next year, while Japan, currently the second-largest economy is forecast to hit 2.8 and 1.5 percent for the same period.

"The slight moderation in recent activity is expected to continue through 2011 in light of tighter quantitative limits on credit growth, measures to cool off the property market and limit bank exposure to this, and the planned unwinding of fiscal stimulus in 2011," the IMF's report stated.

The IMF report also said "private domestic demand is poised to contribute two-thirds of near-term growth, and government activity about one-third, whereas the contri-bution from net exports will be close to zero."

In the first eight months, retail sales and industrial production grew by 18.2 percent and 16.6 percent respectively year-on-year, according to the nation's Statistics Bureau.

"The IMF's projections for China's growth are a little overestimated," said Lu Ting, China economist with Bank of America - Merrill Lynch.

Lu pointed out that the market expects 10 percent GDP growth this year, and 9 percent for next year. He added that China's economic growth might slow and move within a range between 8 and 9 percent over the next couple of years.

The slowdown is part of a general trend, as China's economy is unlikely to zoom as fast as it did in the 1990s, said Cheng Manhong, chief economist with BOCI Holdings, a securities firm and investment arm of Bank of China.

China is trying to shift its growth model from export-driven to one fueled by domestic consumption.

Source: Global Times


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