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China Daily Website

Merrill Lynch raises China GDP growth forecast

Updated: 2013-12-14 14:52
( Xinhua)

BEIJING -- Based on China's macroeconomic data for November, Bank of America (BOA) Merrill Lynch has raised its forecast for China's GDP growth in the fourth quarter of 2013 to 7.8 percent from its previous 7.7 percent.

China's November activity data came in with faster retail sales growth, slower fixed asset investment growth and softer industrial production growth.

The moderation of industrial production growth to 10 percent in November, from 10.3 percent in October, "was mainly a result of a high comparison base thanks to the strong rebound at the end of 2012", said BOA Merrill Lynch's chief China economist Lu Ting in the financial institution's latest report, released on Thursday.

For the full year of 2013, BOA Merrill Lynch maintained its GDP growth forecast for China at 7.7 percent.

With the current momentum, year-on-year GDP growth could rise to 8 percent in the first and second quarters of 2014, thanks to a fall in comparison base, according to the report.

The institution also said it expects the Chinese government to set its 2014 full-year growth target at 7.5 percent, the same as that for 2013, for three reasons.

Firstly, a growth of 7.5 percent is reachable given current domestic demand momentum and global prospects.

Secondly, Chinese leaders believe that some of their scheduled reforms could support growth if they help improve efficiency.

Thirdly, the Chinese government cut its growth target to 7.5 percent in 2012 from an 8-percent target in 2005-2011, and will be wary of cutting again for 2014 as people might lose confidence, said the report.

China's economic growth accelerated to 7.8 percent in the third quarter of 2013. It picked up from 7.5 percent in the second and 7.7 percent in the first quarter.

China's National Bureau of Statistics is expected to release China's fourth-quarter and 2013 full-year GDP growth rates in mid-January.