CRI听力: World Bank Raises China's 2009 Growth Forecast to 7.2 Percent

Anchor: The World Bank has raised its forecast of China's economic growth rate by 0.7 percentage points from its earlier prediction.

Economists at the World Bank say China's expansionary fiscal and monetary policies have kept its economy growing steadily.

But they warn it's too early to expect a sustained and robust recovery of the world's third largest economy.

XYee has the details. (www.hxen.net)

Amid the ongoing global economic downturn, the World Bank projects in its latest China Quarterly Update that the country's GDP growth in 2009 will be 7.2 percent.

Louis Kuijs, the bank's senior economist, says they raised the prediction mainly in view of the positive effects of China's massive stimulus package.

"We have raised our forecast for GDP growth in 2009 to 7.2 percent mainly because of the policy stimulus that is bigger than expected and has a larger impact on the real economy than we initially anticipated."

At the end of last year, China issued a huge stimulus package, equivalent of 586 billion US dollars to offset the negative impact of the international financial crisis. The money was used to shore up the economy, especially infrastructure and social welfare.

The stimulus plan has also enabled the country's industries to weather the global credit crisis and transform its growth pattern by expanding domestic demand.

Louis Kuijs speaks highly of the stimulus policy, saying China should continue its efforts to fight against the shrinking global market.

"We do think that China can have the confidence to emphasize its forward looking policies, which are needed to create and sustain rapid growth in this volatile environment. This can be achieved through increasing growth of the domestic economy."

Figures from the World Bank show that China's imports have sharply increased over the past three months, especially imports of raw materials.

Economists say China's stimulus policies can be seen as a shot in the arm for the world economy.
However, Chinese exports have decreased 20 percent over the last two months year on year.
Ardo Hansson, the World Bank's Chief Economist for China, says the gloomy situation of the world economy may limit the Chinese economy's recovery.

"Growth in China should remain respectable this year and next, although it's too early to say a robust recovery is on the way. Government influence and investment will strongly support growth in 2009. However, there are limits to how much and how long China's growth can and will be maintained based on the global economic environment and government-influenced spending."

Many economists have also pointed out that the Chinese economy still faces severe challenges, including sluggish overseas demands and rising unemployment.

Yet the World Bank stresses China's stimulus policies will continue to pay off and its economy is back on track for recovery and growth.

XYee, CRI news.