The Asian Development Bank said Tuesday it cut its forecast for China’s economic growth this year to 7%, because the impact of the global financial crisis on the country has been much worse than previously thought.
The Manila-based development bank had forecast the world’s third-largest economy would grow 8.2% in 2009 in its semiannual Asia Economic Monitor report that it issued in December.
However, Beijing’s expansionary fiscal and monetary policies to support faltering growth should allow China’s economic growth to recover to 8% in 2010, the bank said in its Asian Development Outlook 2009.
The bank expects growth in China’s gross domestic product to ease to about 6% in the first quarter this year from a year earlier, compared with growth of 6.8% growth in the fourth quarter.
The bank also said China’s GDP growth may rise to about 8% in the second half of 2009. [via WSJ]