Chinese economy to grow 11.2% in 4th quarter

Updated: 2007-11-13 09:53

China's red-hot economy is likely to cool during the fourth quarter as a result of tightening efforts, a think tank report said on Monday.

Gross domestic product (GDP) is expected to expand 11.2 percent in the fourth quarter, according to the State Information Center (SIC), a think tank under the auspices of the National Development and Reform Commission.

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Economic growth would hit 11.4 percent for the whole of 2007, slightly below the 11.5-percent increase registered in the first three quarters of the year, the report said.

The economy is on track for a fifth year of double-digit growth. The previous full-year growth record was 11.1 percent, in 2006.

The SIC report said the government's macroeconomic policies should continue to target overheating risks.

The key inflation indicator, the consumer price index (CPI), would ease to 5.9 percent in the fourth quarter from 6.1 percent during the third quarter, which would help stabilize the full-year figure at about 4.6 percent, according to the report.

The CPI rose 4.1 percent year-on-year in the first nine months and hit an 11-year high of more than six percent in August.

The report said prices of pork and eggs, which contributed significantly to rises in the CPI, are expected to be contained during the fourth quarter by a government crackdown on food price hikes and subsidies offered to pig breeders.

However, it said that inflationary pressure would persist as grain prices continued to rise, which could have a negative impact on feedstuff prices. Further, industrial prices could face rising pressure from recent surges in world crude oil prices.

The report urged the government to closely monitor prices.

It said that prices of dairy products and seafood, which previously rose only slightly, required particular scrutiny. Otherwise, shortages of these items could cause price spikes next year, similar to the experience with pork prices.

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