Business
        

Economy

China's GDP to grow 9.6% in 2011: IMF

Updated: 2011-04-28 16:01

(Xinhua)

Twitter Facebook Myspace Yahoo! Linkedin Mixx

China's economy is expected to grow 9.6 percent in 2011, the International Monetary Fund (IMF) said in a report released in Hong Kong on Thursday.

The figure was unchanged from IMF's October forecast last year, and was moderated from 10.3 percent growth in 2010 as policy tightening slows investment.

Consumer price inflation in China rose during the course of 2010, and reached 4.9 percent year-on-year in January and February 2011. Inflation appears close to peaking, as food supply shocks begin to work themselves out of the system, the IMF said.

There are few signs that wage increases are outpacing productivity gains -- sequential growth of industrial unit labor cost is around zero and the latest household surveys suggest that wage incomes are still falling as a share of GDP (gross domestic product).

Related readings:
China's GDP to grow 9.6% in 2011: IMF WB raises China 2011 GDP forecast, urges more tightening
China's GDP to grow 9.6% in 2011: IMF China set for No 1 spot by 2030
China's GDP to grow 9.6% in 2011: IMF China's economy to surpass US in 2016: IMF
China's GDP to grow 9.6% in 2011: IMF 
China's economy expands 9.7% in Q1

Barring future supply shocks, inflation in China is likely to return toward the low single digits in the second half of 2011. Nevertheless, the economy is still vulnerable to further domestic supply shocks and rising global commodity prices, particularly food. In this environment, it will be important therefore to maintain a prudent monetary stance to forestall the possibility that inflation may become more generalized and entrenched, the IMF report said.

There are also signs that overheating pressures are building up. Credit dynamics are particularly strong in the mainland and Hong Kong. Property markets appear relatively buoyant in certain segments in the mainland, Hong Kong and Taiwan, the report showed.

In Japan, a pickup in activity emerged in early 2011, but was interrupted in mid-March by the earthquake and tsunami that caused extensive loss of life and property in Japan. Japan's growth is expected to moderate from 3.9 percent in 2010 to 1.4 percent in 2011.

A prolonged disruption in production and transportation facilities would affect regional production networks by more than anticipated in IMF's baseline. Moreover, the need to replace or at least supplement nuclear power (which represents about 30 percent of Japanese energy supply) with other energy sources, as well as the reconstruction efforts, could pose upward pressure on global commodity prices, the organization said.

The impact of Japan's natural disaster is also likely to be felt well mainly through trade channels on the supply side.

E-paper

Head on

Chinese household care goods producers eye big cities, once stronghold of multinational players

Carving out a spot
Back onto center stage 
The Chinese recipe

European Edition

Specials

British Royal Wedding

Full coverage of the royal wedding of Prince William and Kate Middleton in London. Best wishes

The final frontier

Xinjiang is a mysterious land of extremes that never falls to fascinate.

Bridging the gap

Tsinghua University attracts a cohort of foreign students wanting to come to China.

25 years after Chernobyl
Luxury car show
Peking Opera revival