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Official think tank sees China 2010 GDP up 10%

(Agencies)
Updated: 2010-02-08 09:38

An official think tank has forecast China's GDP will expand around 10 percent in 2010, driven by investment and domestic consumption, the official Xinhua agency reported on Sunday.

Strong first-quarter growth of 11 percent will slow slightly for the rest of the year, with the pace of expansion dipping just below 10 percent in the second half, the Center for Forecasting Science at the Chinese Academy of Sciences said in the report, which was issued at the weekend.

Growth in the third and fourth quarters will be 9.5 percent and 9.8 percent respectively, it said.

Foreign trade will rebound as the global economy improves, but overall net exports will be a drag on growth, bringing GDP expansion down by around 0.5 percentage points, the report said.

Exports will rise 16.6 percent and imports by 18.9 percent, with the overall value of foreign trade up 17.6 percent.

The government's economic stimulus plan, which aims to bolster the Chinese economy amid the economic slowdown, will continue to drive investment, but growth will slow to 25 percent from 30.1 percent in 2009, the report said.

It also forecast a 3.1 percent rise in the consumer price index as the economic revival, ample liquidity and inflation expectations drive up prices, Xinhua said.

While seemingly mild given the extent of China's monetary stimulus over the past year, the higher inflationary expectations are likely to worry those already concerned about the possibility of economic overheating.

China's GDP last year grew 8.7 percent. The median 2010 GDP forecast of economist polled by Reuters late last month was 9.5 percent.

The IMF has forecast 10 percent growth for 2010.