EC says China lowers growth rate
Updated: 2014-02-26 02:47
By Fu Jing in Brussels (Chinadaily.com.cn)
The European Commission said on Tuesday that China will adjust its previous high annual economic growth rate to lower than .5 percent in 2014 and 2015, partly due to underlying domestic risks and external pressures.
The slowdown, which Beijing has said it implemented on its own, contrasts to the continuing recovery of such advanced economies as the United States and the European Union as a whole.
Forecasting that China will achieve an annual growth rate of 7.4 percent in 2014 and 2015 respectively, the commission said in its latest economic outlook that China's domestic downside risks from the financial sector appear to have been heightened, and the potential difficulties of achieving a successful rebalancing of demand are evident.
While some global risks linked to advanced economies have become more balanced, risks in other emerging markets have become more pronounced, according to the report.
China's economy continues to grow rapidly, expanding by 7.7 percent in 2013, almost the same rate as in 2012, which was 7.8 percent.
The US economy has improved since the commission's forecast in the fall because the negative impact of last October's budget crisis proved much less severe than expected, and the recent budget and debt ceiling agreements dissipated fiscal policy uncertainty and boosted confidence, according to the report.
US growth is now expected to climb to 2.9 percent this year from 1.9 percent in 2013 and to 3.2 percent next year, reflecting the waning fiscal drag, firming investment and a steady housing market recovery, the commission said.
Brussels has foreseen a continuation of the economic recovery in most of its member states and in the EU as a whole. After exiting recession in spring 2013 and three consecutive quarters of subdued recovery, it said the outlook is for a moderate step-up in economic growth.
Following real GDP growth of 1.5 percent in the EU and 1.2 percent in the euro area in 2014, activity is seen accelerating in 2015 to 2.0 percent in the EU and 1.8 percent in the euro area, said the commission.