The World Bank cut its forecast for growth in China this year to 8.2pc on Thursday from 8.4pc previously, reinforcing the view that the world's second largest economy is set for its slowest annual growth in a decade.
"There is the potential for growth to be bumping along the bottom for longer," Ardo Hansson, the World Bank's lead economist for China, told a news conference to release the multilateral lender's quarterly update on China.
The revisions comes ahead of China's official first-quarter growth report due on Friday.
The Bank's new growth forecast would mark a 13-year low.
An 8.2pc expansion would mean China's economy was growing slightly below its potential rate, Mr Hansson said. In economic terms, it implies Beijing has space to tweak policies to boost growth without igniting inflation.
"We see cyclical weakness continuing, but that the prospects for a soft landing remain high," he said, adding that Beijing had considerable fiscal resources available to help bolster the economy if risks to the downside accelerate.
But in a sign that activity could rebound next year, the World Bank said it had raised its 2013 growth forecast for China to 8.6pc, from 8.3pc.
The World Bank forecast China's export growth at 9.7pc this year and 11.6pc in the next, with import growth likely at 12pc in 2012 and 12.5pc in 2013.
That would see external demand having a negative contribution to growth for a second successive year, with trade subtracting 0.3pc from GDP in 2012 and adding nothing at all in 2013, according to the Bank's forecasts.
While risks to overseas demand for goods from China's vast factory sector were seen as a key external restraint on growth in the near term, the bigger problem was domestic real estate.
The report welcomed the gradual cooling of a sector that had been in the grip of a speculative frenzy before the government unveiled a slew of policies to calm it two years ago.
But it cautioned that downside risks were centred on that adjustment.
"Given the significance of the sector in the overall economy, continued vigilance will be required to contain negative spillover effects," the report said. "A more amplified downturn could have negative economy-wide impacts."
telegraph.co.uk
"There is the potential for growth to be bumping along the bottom for longer," Ardo Hansson, the World Bank's lead economist for China, told a news conference to release the multilateral lender's quarterly update on China.
The revisions comes ahead of China's official first-quarter growth report due on Friday.
The Bank's new growth forecast would mark a 13-year low.
An 8.2pc expansion would mean China's economy was growing slightly below its potential rate, Mr Hansson said. In economic terms, it implies Beijing has space to tweak policies to boost growth without igniting inflation.
"We see cyclical weakness continuing, but that the prospects for a soft landing remain high," he said, adding that Beijing had considerable fiscal resources available to help bolster the economy if risks to the downside accelerate.
But in a sign that activity could rebound next year, the World Bank said it had raised its 2013 growth forecast for China to 8.6pc, from 8.3pc.
The World Bank forecast China's export growth at 9.7pc this year and 11.6pc in the next, with import growth likely at 12pc in 2012 and 12.5pc in 2013.
That would see external demand having a negative contribution to growth for a second successive year, with trade subtracting 0.3pc from GDP in 2012 and adding nothing at all in 2013, according to the Bank's forecasts.
While risks to overseas demand for goods from China's vast factory sector were seen as a key external restraint on growth in the near term, the bigger problem was domestic real estate.
The report welcomed the gradual cooling of a sector that had been in the grip of a speculative frenzy before the government unveiled a slew of policies to calm it two years ago.
But it cautioned that downside risks were centred on that adjustment.
"Given the significance of the sector in the overall economy, continued vigilance will be required to contain negative spillover effects," the report said. "A more amplified downturn could have negative economy-wide impacts."
telegraph.co.uk
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