Goldman Sachs Predicts Faster Expansion for China’s Economy

Despite its slowest economic growth in at least a decade to just 6.1% in Q1’09, Goldman Sachs (GS) said Wednesday the world’s third-largest economy will experience a faster pace of expansion than earlier estimates.

From Bloomberg: China’s economy will expand faster than previously forecast this year and next as the government’s 4 trillion-yuan ($586 billion) stimulus package spurs domestic demand and boosts investment, Goldman Sachs Group Inc. said.

The…..economy will expand 8.3 percent in 2009, from an earlier estimate of 6 percent, Hong Kong-based economists Helen Qiao and Yu Song wrote in a note published today. CLSA Asia-Pacific Markets also increased its estimate for growth this year to 7 percent from 5.5 percent earlier…

“Policy makers in China have been pushing the envelope on policy easing in only one direction — for more and more,” the Goldman Sachs economists said. “In the next three quarters, we expect domestic demand growth to further strengthen, bolstered by loose financial conditions and continued policy stimulus.”

Growth will quicken to 10.9 percent next year, compared with a previous prediction for a 9 percent expansion, they said.

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