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Chinese leaders push economic rebalancing
(Reuters/AFP)
Updated: 2005-11-30 07:27

OECD raises economic growth forecasts for China

China's economy is likely to see continued brisk growth over the next two years, the Organization of Economic Cooperation and Development (OECD) said as it revised its forecasts.

The OECD said in its "Economic Outlook" report it expected Asia's second-largest economy to expand by 9.3 percent this year, followed by 9.4 percent in 2006 and 9.5 percent in 2007.

This compares with the OECD's "Economic Survey of China," published in September, which predicted 9.0 percent growth this year and 9.2 percent in 2006.

"Economic growth in China has remained rapid in 2005 buoyed by the strong contribution from the external sector," the report said, noting that brakes on textile exports had had a limited effect on the economy.

"During the projection period, output growth may stay above nine percent and seems likely to be driven by domestic demand," it said.

Domestic investment in particular is likely to be vibrant over the coming months, with financing coming especially from the private sector, according to the OECD.

"Private sector investment may remain buoyant given strong profitability, while construction activity may rebound due to an easing of the restrictions on the conversion of land from agricultural to commercial or residential uses," it said.

"With internal demand accelerating and a slight exchange rate appreciation, the growth of imports will help to stem the rise in the current account surplus relative to GDP (gross domestic product)," it said.

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