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China's GDP will fall to 9.8 percent in 2011: Think tank

Beijing, Mon, 24 Jan 2011 ANI

Beijing, Jan 24 (ANI): A Chinese government think tank has claimed that his country's Gross Domestic Product (GDP) growth is expected to retreat to 9.8 percent this year, with inflation likely to be under control at 3.7 percent.

"Tighter credit and a higher economic growth base in 2010 will drag down the 2011 GDP growth figure," the China Daily quoted a report released by the Center for Forecasting Science of the Chinese Academy of Sciences, as saying.

"Next year, domestic demand will replace investment as the main driver of the Chinese economy," it added.

According to the latest figures released by the National Bureau of Statistics' (NBS), China's 2010 GDP growth increased by 10.3 percent year-on-year, doubled within three years of the global financial crisis' onset. It was 9.6 percent in 2008 and 9.2 percent in 2009.

Meanwhile, PMorgan Chase has predicted that China's GDP growth will decrease to 9.6 percent in 2011, while the World Bank said the world's second-largest economy's growth is expected to ease to 8.4 percent in 2012 amid credit-tightening measures to combat inflation and increasing property prices.

The Chinese Academy of Sciences' report also predicted the consumer price index (CPI), a main gauge of inflation, will decrease to 3.7 percent this year, while the producer price index (PPI), a measurement of inflation in wholesale prices, will be at 4.6 percent.

The rate of property price increases is also expected to slow down, and the average is predicted to be 5,711.51 Yuan (867 dollars) per square meter, a 12.77 percent increase over last year, the report said.he paper quoted Dong Jichang, a professor with the institute, as saying that drastic measures taken by the central government last year have stabilised property prices in major cities. He also said that: "the impacts of regulatory real estate market measures will be examined this year".

The think tank also said inflation is expected to reach its highest level in the first quarter of the year as a result of ising commodity and property prices. (ANI)