9% GDP growth tipped for next year

By Xin Zhiming (China Daily)
Updated: 2008-12-03 06:52

China could next year notch up growth of 9 percent, or even above, as the world's fourth-largest economy pulls out all stops to stimulate investment and consumption, the nation's top think tank said on Tuesday.

"I think China can achieve 9 percent GDP growth, or even higher," said Wang Tongsan, a senior economist at the Chinese Academy of Social Sciences (CASS), at a news conference releasing the academy's annual economic forecast, or Blue Book.

"The possibility is quite high - it could be at least 70 percent possible that GDP growth reaches 9 percent next year."

The economic forecast research team said in an article in the CASS blue book that next year, economic growth could reach 9.3 percent, compared with this year's estimated 9.8 percent.

Zheng Jingping, an official at the National Bureau of Statistics, also said in an article for the CASS book that growth would be about 9 percent next year.

The forecasts are higher than those made by international organizations.

The World Bank said last month that China's growth may slow to 7.5 percent next year, the lowest since 1990. Though the bank expects 9.4 percent growth this year, it said the global financial crisis would take a greater toll in 2009.

An Organization of Economic Cooperation and Development report said China's growth next year could be 8 percent, while the International Monetary Fund put it at 8.5 percent.

The CASS' Wang said the government's forceful stimulus moves would make a big difference next year. "We believe the pro-active policies to stimulate domestic demand will work and the effect will be impressive," Wang said, referring to the country's $586 billion stimulus plan announced on Nov 9.

Local governments have also pledged to follow suit to help prevent the national economy from sliding further after it registered an annualized 9 percent growth in the third quarter of this year, compared to nearly 12 percent for last year.

The central bank slashed the benchmark interest rates by 1.08 percentage points last week, the steepest cut in 11 years, to reduce borrowing costs for enterprises and individuals, and bolster confidence.

More supportive fiscal and monetary policies are believed to be in the pipeline, analysts said.

Given the serious global financial turmoil and economic slowdown, China would not be unscathed but "we should be confident in China's stable economic growth, or relatively high growth", Wang said.

He said there are two prerequisites for the GDP to grow by at least 9 percent: The US economy does not significantly worsen and China's pro-growth economic policies are well implemented.

The CASS team also forecast that China's consumer price index (CPI), the key gauge of inflation, could drop to 4.3 percent next year from more than 6 percent this year.

"The falling trend of CPI is entrenched," said Wang, adding it would not rebound in the coming months.

Zheng from the NBS put CPI growth much lower for next year, at around 3 percent.

The urban jobless rate, meanwhile, could rise to 4.5 percent next year from this year's 4 percent, according to a forecast by Fan Jianping, an economist from at the State Information Center.