China’s GDP to grow by 10.4% in 2008: report
China’s growth of the gross domestic economy (GDP) is predicted to slow down to 10.4% this year due to a deteriorating external environment and domestic tightening policy, according to a research report by Renmin University of China (RUC) and Donghai Securities
The tight monetary policy is not a long-term strategy to directly curb the prices, and may only be effective in adjusting people’s expectations on inflation. The government should raise the fiscal spending and use more reserve requirement increases and bill sales in the second half of the year to boost economy as well as curb the inflation.
Last year, the GDP growth was 11.9%, and it slowed down to 10.6% in the first quarter this year due to the weakening demands for Chinese exports and the worst winter storms.
The report also predicted the CIP is likely to grow 7.1% this year, high above the government’s goal of 4.8%, while the trade surplus to plunge to US$ 3.4 billion.
The CPI slowed to 7.7% in May this year, as compared to the growth of 8.5% in April, 8.3% in March, and 8.7% in February, a record high in the latest 12 years. Trade surplus declined 10% year-on-year to US$20.2 billion in May, and it advanced 47.7% to a record high of US$262.2 billion last year.
Tags: CPI, exports, GDP, inflation, trade