China’s GDP growth to slow to 8.6 percent

December 18th, 2011 - 11:14 pm ICT by IANS  

Beijing, Dec 18 (IANS) China’s GDP growth may slow to 8.6 percent in the last quarter of this year and further decelerate to 7.7 percent in the first quarter of 2012, an economist said Sunday.

The forecasts were based on China’s export growth slides, weak fixed asset investments and contraction in industrial production, among others, said Wang Tao, chief economist of UBS Securities.

The Purchasing Managers’ Index, a preliminary indicator of China’s manufacturing activity, dropped below the boom-bust line of 50 percent in November.

China’s GDP growth slowed to 9.1 percent in the third quarter from 9.5 percent in the second quarter and 9.7 percent in the first quarter, Xinhua reported.

The export growth in November dropped to its lowest level since December 2009 as demand for made-in-China goods shrank due to the escalating Eurozone debt crisis.

Trade prospects for 2012 have been described as “grim” with major partners in the doldrums, which Wang said will make the country’s GDP growth to slow to 8 percent in 2012.

Although the cold weather and upcoming Spring Festival might temporarily push up food prices, growth of the consumer price index (CPI), a main gauge of China’s inflation, will continue to ease in the coming months, she added.

Wang expected the country’s CPI growth to fall below 3 percent in the summer of next year, with the annual CPI rise to reach 3.5 percent in 2012.

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