October 12, 2008

IMF cuts Chinese economic growth forecasts to about 9%

Xinhua reported that International Monetary Fund has adjusted its forecasts for the global economic growth in 2008 downward to below 4%, with a growth of just above 9% for the Chinese economy.

Mr Olaf Unteroberdoerster IMF's resident representative in the Hong Kong Special Administrative Region said that the recovery in the global economy will also come slower than a previous projection put forward by the IMF six months ago. He added that "The outlook for the global economy today is much worse than it was a year ago."

Mr Unteroberdoerster said the world economic growth would be below3% in 2008 and did not rule out a global repression. The world economy averaged a growth of 4.9% in 2007, down by 0.1 percentage points from the previous year and the IMF has projected a growth of 3.7% in its forecasts announced in mid April 2008. China had a growth of 11.4% in 2007.

Mr Unteroberdoerster said the advanced economies, such as the United States and the European Union, were most affected by the current financial turbulence. He added that "If you look at the housing sector in the United States, it is obvious that there is no sign of a recovery yet."

China, which has had a rising exposure to demand from the United States and the EU over the past decades, will grow at just above 9% in 2008. India, less exposed to demand from the advanced economies, will be less affected by the slowdown.