ADB trims growth expectations for '09

The Asian Development Bank (ADB) yesterday cut China's economic growth forecast to 9.5 percent from 9.8 percent for 2009, due to the expected reduced trade surplus and weakening domestic investment, but maintained its previous forecast of 10 percent growth for this year.

It also warned that inflation could reach 7 percent this year, much higher than the 4.8 percent target set by the government. The high inflation is mainly due to the exceptionally high rate in the first half of this year, the bank said. China's consumer inflation dropped to 4.9 percent in August from February's peak of 8.7 percent.

Given the signs of recent monetary policy relaxation, Zhuang Jian, a senior economist with the ADB in Beijing, said China's economic growth in the third and fourth quarters could stand at around 9.5 percent despite the global economic slowdown, which led many economists to forecast growth of less than 9 percent in the two quarters.