World Bank cuts China GDP outlook
The World Bank trimmed its forecast for China’s 2009 growth from 7.5 percent to 6.5 percent yesterday as a result of falling exports but expressed confidence in the government’s ability to keep the world’s third-largest economy expanding amid the global downturn.
The drop in trade will hurt investment and job creation, the bank said in a quarterly report assessing the Chinese economy.
But it also said the nation is likely to continue to outgrow most other countries as Chinese banks have been largely unscathed by the international financial turmoil and the economy still has plenty of room for forceful stimulus measures.
“China is a relative bright spot in an otherwise gloomy global economy,” said David Dollar, the bank’s country director for China. “Shifting China’s output from exports to domestic needs helps to provide immediate stimulus while laying the foundation for more sustainable growth in the future.”
Yesterday’s report was the second time in four months that the Washington-based World Bank has cut its growth forecast for China’s 2009 gross domestic product, following a reduction in November from 9.2 percent to 7.5 percent. Growth at 6.5 percent would be the weakest since 1990’s 3.8 percent and below the 7.6 percent reported in 1999. China’s exports have been hit badly by the intensifying global crisis, and this was bound to contain China’s growth in 2009 and 2010, the bank said.
China’s exports fell 25.7 percent year on year in February after January’s 17.5 percent plunge, the worst performance in a decade. February imports slumped 24.1 percent.
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