WB ups China’s economic growth forecast to 9.8%

Jun. 20, 2008 (China Knowledge) – The Inflatable Boxing Ring World Bank raised its previous forecasts for China’s economic growth to 9.8% this year, largely due to the strong growth in country’s service sector, Chinese Xinhua agency reported.

Last month, the World Bank predicted the economy to expand by 9.4% this year, also down from the 9.6% it predicted at the beginning of this year, and 10.8% in 2007 mid-year, according to the report.

China’s economic growth moderated to a more sustainable pace, said the bank in its quarterly update on the Chinese economy. The domestic economy was holding up well and the exports, supported by its international competitiveness, also contribute to the country’s economic growth this year.

However, the bank said the tight money policy is still needed to curb the inflation and the rising raw material prices.

The country’s consumer price index (CPI) inflation growth had climbed to 8.7% in February this year, which is the highest in the past 12 years. The bank expected the food price would come down before they have hefty impact on the non-food consumer prices and it pointed out the inflation could only come down gradually.