Economy

China's economic growth to slow to 9.2% in Q3: think tank

(Xinhua)
Updated: 2010-08-05 06:22

BEIJING - China's economic growth would continue to cool in the third quarter as the government reduces stimulus measures, thus lowering inflation expectations, a government think tank said on Wednesday.

The gross domestic product (GDP) would grow by 9.2 percent in the third quarter from the same period last year, the State Information Center said in its economic review quarterly.

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Annual inflation would grow at around three percent, it said.

The world's third largest economy expanded at 10.3-percent year-on-year in the second quarter, slower than the 11.9-percent growth in the first quarter and the 10.7-percent growth in last quarter of 2009

The moderate growth was welcomed by economists, as they said the rate was more sustainable and would help accelerate economic restructuring and prevent overheating.

The report noted consumer spending would remain robust in the third quarter boosted by wage increases and government subsidies on home appliance purchases.

However, slower housing sales following the government's tightening of the real estate industry would hold back consumer spending to a certain extent, it said.

The cooling property market also made investors less anxious about inflation, the report said.  In addition, the upping of banks' deposit reserve ration and tighter lending rules had served to drain liquidity and stem inflation.

The report noted consumer prices would increase at moderate pace in the latter half of the year, but unstable food prices due to the extreme weather and labor shortages in some regions would add uncertainty.

China's 2010 annual economic growth target is set at around 8 percent.