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Workers install a power grid system for the Harbin-Dalian passenger railway terminal in Dalian, Liaoning province. (Yang Yongqian / China Daily) |
Economists say they expect more stimulus policies to spur economy
A new survey of leading Chinese economists, suggests they expect to see lower inflation and more government stimulus in the third quarter, and higher confidence in the second half of this year.
The quarterly survey from the China Economic Monitoring and Analysis Center under the National Bureau of Statistics was conducted among 78 leading economists, and showed that 72 percent of them expected higher than 8 percent growth this year supported by further economic policies.
The survey's overall index, which indicates respondents' confidence in the country's economic situation, is expected to rebound to 4.8 in the second quarter, compared with 4.48 in the first three months. The evaluation range for the index is from 1 to 9.
Respondents said they expected China's inflation rate to further ease in July, because of continued low food prices, giving the government more leeway to loosen price policies, economists said.
Many experts predicted that the consumer price index, a main gauge of inflation, may drop to 1.7 percent in July from June's 2.2 percent, to reach its lowest level in 30 months.
Lian Pin, chief economist with the Bank of Communications Co Ltd, said that if no unexpected factors arise in the third quarter, the CPI may reach 2 percent during the July-to-September period.
To support economic growth, the government's monetary policy may move to "moderate easing" from its current "prudent" stance. Further cuts are expected in interest rates and reserve requirement ratios in the third quarter.
The People's Bank of China, or the central bank, lowered the RRR twice in the first half of the year, by 50 basis points each time, to increase market liquidity.
It also lowered benchmark interest rates twice in a month, responding to worse-than-expected economic indictors in the second quarter.
"The central bank may cut benchmark interest rates again this quarter, while fiscal deposits may increase faster during these three months," said a recent report from the China Securities Co Ltd.
Overshadowed by weaker GDP growth that reached 7.6 percent in the second quarter, the slowest growth rate in three years, investors in the stock market became pessimistic.