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GDP forecast to slow to 7%

2014-12-30 08:55 Global Times Web Editor: Qin Dexing

Govt think tank sees 7% increase in 2015

China's economy is likely to expand at a slower pace of 7 percent in 2015 and 7.3 percent this year, a government think tank said in a report on Monday.

Due to factors such as overcapacity in some manufacturing industries, the country's GDP growth will show a downward trend in 2015 and it is expected to be around 7 percent for the whole year of 2015, the State Information Center (SIC) said in a report published by the China Securities Journal on Monday.

Growth of fixed-assets investment, as a key driving force of China's economic growth, is likely to slow to 14 percent next year, 1.5 percentage points lower than in 2014, the SIC said.

China's export growth, another supporting pillar for GDP growth, is expected to reach 7 percent in 2015, the SIC said, which is below this year's 7.5 percent target for trade growth.

The report said that China's economy will continue to face downturn pressure.

This trend has been noticed by the country's leadership which announced in this month's Central Economic Work Conference that it was placing stabilizing economic growth atop the list of major economic goals for the coming year, according to Tian Yun, an economist with the China Society of Macroeconomics affiliated to the National Development and Reform Commission.

The SIC report came amid a raft of economic indicators released recently which have provided gloomy signals about the economy growth.

According to official data released Sunday, China's industrial profits dropped by 4.2 percent in November from the same period last year, the biggest decline in 27 months.

Based on the economic indicators released recently, the SIC forecast in its report that China's economy will expand at around 7.3 percent in 2014.

"We forecast China's GDP will grow 7.4 percent this year," Tang Jianwei, an analyst at the Bank of Communications, told the Global Times on Monday.

But Tang further noted that the growth is still in line with the government's full-year GDP growth target of slightly over or below 7.5 percent.

"It's easy for the central government to implement stimulus policies to better fit its full-year target of economic growth but it doesn't, which could be seen as a new guiding idea of macro-policies that will be implemented in the coming years as the country adapts to an economic new normal of slower speed but higher quality economic growth," said Tian.

Besides stimulus policies, China is expected to focus more on economic reform and a flurry of reform measures covering areas including real estate, pension, and finance would be undertaken, said Tian.

The government will also speed up reforms in fields that include the capital market, overseas investment and the market access of private banks next year, and China's economy will still have huge growth potential under the new round of reform, the SIC said.

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