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IMF cuts China's growth forecast to 9.5%

China.org.cn, September 21, 2011

The International Monetary Fund (IMF) said Tuesday it has cut the 2011 economic growth forecast for China to 9.5? percent from the 9.6 percent in June.

The IMF expected China to grow 9 percent in 2012, compared with the 9.5 percent forecast in June.

The IMF also trimmed its forecast of economic growth for India and other Asian countries, partly because of slower growth in other parts of the world.

Asian "growth remains strong, although it is moderating with emerging capacity constraints and weaker external demand," said the IMF said in its latest World Economic Outlook (WEO).

As to China, the IMF pointed out that investment growth had decelerated with the unwinding of the country's fiscal stimulus, but it remained the principal contributor to growth.

Although inflationary pressure remains high, China's inflation and credit growth had softened from recent record levels due to persistent government efforts, the report said.

These efforts included administrative limits on credit growth, higher interest rates and tighter reserve requirements, as well as the loan-to-value limits in mortgage credit and restrictions on multiple home purchases to rein in property prices.

China would continue to outpace other economies but the average economic growth of 9.0 to 9.5 percent during 2011-2012 was less than the average of about 10.5 percent during 2000-2007, as ongoing policy tightening and a smaller contribution from net external demand moderated activity, the IMF said.

The IMF lowered its forecasts for all developing Asian countries to 8.2 percent growth in 2011 and 8.0 percent growth in 2012, from its June forecast of 8.4 percent growth for both years.

The IMF put its forecast for world economic growth at 4 percent in both 2011 and 2012, 0.3 and 0.5 percentage point lower than its June forecast.

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