World Bank expects Chinese economic slowdown

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BEIJING, June 19, 2008 (AFP) – The World Bank said Thursday it expected China’s economic growth to fall to single digits in 2008 for the first time in six years, while inflation would be higher than previously forecast. “China’s economic growth has moderated to a more sustainable pace,” the bank said in its quarterly report on China, adding it expected 9.8 percent expansion this year, down from 11.9 percent in 2007.

The moderation was in line with weaker global economic performance, but China’s growth will still supported by strong international competitiveness and a robust domestic economy, it said.

Meanwhile, the forecast for inflation this year was raised to 7.0 percent from 4.6 percent less than three months ago, amid spiralling commodity prices.

China’s consumer price index rose 4.8 percent in 2007, fuelled mainly by food prices. But inflation was at 7.7 percent last month, lingering at close to 12-year highs.

“Inflation is expected to come down only gradually. There are significant risks attached to inflation projections, particularly from higher international commodity and energy prices,” the report said.

The bank predicted inflation of 5.3 percent next year.

The report argued that