RTTNews - Thursday, in its latest China Quarterly Update, the World Bank raised the growth forecast for 2009 to 7.2% from 6.5% estimated in March. At the same time, the bank noted that the growth is unlikely to rebound to very high single digit rates until the world economy recovers convincingly.
Growth in China should remain respectable this year and next, although it is too early to say a robust sustained recovery is on the way, Ardo Hansson, Lead Economist for China said.
Hansson indicated that government influenced investment would strongly support growth for 2009, but there were limits to how much and how long China's growth could diverge from global growth based on the government influenced spending.
Meanwhile, Louis Kuijs, Senior Economist and main author of the Update pointed out there would no need for additional stimulus in 2009. This was because the fiscal deficit was on course to be significantly higher than budgeted this year, and additional stimulus now would reduce the room for stimulus next year.
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