Global Biz

Global economy to grow 3.3% in 2011, China up 8.7%

(Xinhua)
Updated: 2011-01-13 21:28

WASHINGTON - Global economy, which increased by 3.9 percent in 2010, is expected to grow 3.3 percent this year and 3.6 percent in 2012, according to the Global Economic Prospects 2010, a report released by the World Bank on Wednesday.

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"The world economy is entering into a new phase of recovery," said Justin Yifu Lin, the World Bank's chief economist and senior vice president of development economics.

According to the report, developing countries, which were leading engine of the global recovery after the financial crisis, are expected to grow 7 percent in 2010, 6 percent in 2011 and 6.1 percent in 2012.

They "will continue to outstrip growth in high-income countries, which is projected at 2.8 percent in 2010, 2.4 percent in 2011 and 2.7 percent in 2012."

The report predicts China's economy, the biggest emerging economy, is to grow 8.7 percent in 2011 and 8.4 percent in 2012.

"For China, domestic demand contributed some 7.8 percentage points to overall growth of 10 percent in 2010, with net trade contributing the remainder," said the annual report released by the Washington based international institution.

The report noted that China's economy is becoming stronger to some extent, with industrial output stood some 34 percent above pre-crisis peak levels.

But China's growth moderated over the course of 2010 with domestic demand cooling gradually as stimulus faded and the monetary stance tightened.

The World Bank expects that growth in China is likely to ease from the near 10 percent pace of 2010 -- due in part to the unwinding of fiscal stimulus, restrictions place on over-heating sectors and a general tightening of monetary conditions in the face of rising inflation pressures.

Nevertheless, industry-led, capital intensive growth is likely to keep GDP gains near 8.5 percent over the period, with net exports contributing smaller shares of growth than in the pre-crisis years.

According to the report, China remains a source of growth of the global economic recovery and the focal point of regional activity in East Asia.