Beijing: On account of inflation pressures and tightening of monetary policy, growth in Chinese economy is likely to come down to 9.6 percent this year from 10.3 percent last year, according to the Asian Development Bank (ADB). (Agencies)
China's economy is expected to grow 9.6 percent in 2011 as fixed asset investment remains a key driver, the Bank said in an annual report released here on Wednesday.
With inflation pressures building and tightened monetary policy, China's gross domestic product (GDP) growth was forecast to be moderate this year, compared with a growth of
10.3 percent in 2010, the ADB said in its 2011 Asian Development Outlook, which expected a growth of 9.2 percent in China in 2012.
China's inflation rate, which averaged 3.3 percent in 2010, will pick up to 4.6 percent in 2011, lifted by abundant liquidity and higher food and commodities prices, it said, estimating that the inflation will ease back to 4.2 percent in 2012 as commodity prices level off.
Fixed asset investment will remain a key driver of growth, although the expansion rate is set to decelerate slightly from past levels, standing at 22 percent in 2011 and 20 percent in 2012, respectively, due to the winding back of fiscal stimulus measures and tighter monetary policy, the bank said.
With the slowdown in major industrial economies, Chinese government has laid out measures to re-balance economic growth drivers in its 12th Five-Year Plan (2011-2015) by putting more emphasis on domestic consumption and services, the bank said.
"Global imbalances have become more pronounced, and the recent global recession highlighted the risk of heavy reliance on foreign demand for growth," Changyong Rhee, ADB's chief economist said in a statement released on Wednesday.
The ADB projected a 1.5 percent GDP growth in 2011 in disaster-hit Japan.
"Aside from energy, the regional and global impact of the Japanese earthquake is hard to quantify but likely to be temporary and limited," the bank said.
In light of projected slower global trade and moderating growth in Chinese mainland, Hong Kong's economy has been forecast to expand 5 percent in 2011, easing to 4.7 percent
in 2012, as inflation rate is seen to reach 4.5 percent, due to higher global fuel and food prices, rising housing costs, and a likely increase in wages.
The bank's forecast growth for Developing Asia, comprising of 45 economies in the region excluding Japan, has been at 7.8 per cent in 2011, with an inflation rate of 5.3 per cent.
Beijing: On account of inflation pressures and tightening of monetary policy, growth in Chinese economy is likely to come down to 9.6 percent this year from 10.3 percent last year, according to the Asian Development Bank (ADB).