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World Bank sees benign outlook for China economy
(Reuters)
Updated: 2006-02-09 09:29

China should enjoy another year of strong growth and moderate inflation in 2006, with gross domestic product growth likely to reach 9.2 percent, the World Bank said on Thursday.

In its latest quarterly economic update, the bank said the outlook for China's economy remained benign although consumption may not accelerate much this year because of subdued rural income prospects.

"China will benefit from solid export demand, while profit and credit developments suggest that investment remains robust," the bank said.

China's gross domestic product increased 9.9 percent in 2005, marginally slower than growth rates of 10.1 percent in 2004 and 10.0 percent in 2003.

The results of a nationwide economic census released in December showed the economy was 16.8 percent bigger than previously thought in 2004, largely because the services sector had been under-reported.

The bank said that the GDP revisions moderate, but do not substantially change, the main structural challenges facing the economy. Changing the composition of domestic demand may still take time, the bank said.

The bank forecast that consumer price inflation in 2006 would be unchanged at 1.8 percent.