WB forecasts 9.2pc growth in China
Beijing, February 9:
China’s economy will grow by 9.2 per cent this year but continue to face challenges from its over-reliance on investment and insufficient growth in domestic consumption, the World Bank (WB) said today.
The bank offered a ‘benign’ outlook for the world’s fastest growing economy in its China Quarterly Update, attributing continued rapid growth to robust investment, increasing domestic demand and strong exports.
However, domestic consumption is not expected to expand fast enough in 2006 to achieve the government’s goal of relying less on investment, largely because rural incomes will not grow as rapidly as last year, the report stated. The one-off nature of recent measures benefiting China’s 800 million rural dwellers, including a removal of agricultural taxes, boosted income last year but will have little effect in 2006, the bank said.
To achieve balanced gro-wth, the government will need to invest more on social services, like health car-e, education and a social sa-fety net and to encourage farmers, the bank said.