Slight slowdown tipped in economic growth

PUBLISHED : Friday, 28 July, 2006, 12:00am
UPDATED : Friday, 28 July, 2006, 12:00am

The mainland's robust economic growth is likely to slow only slightly in the third quarter, the nation's top planning agency says, suggesting a continuation of pressure on Beijing to further tighten macroeconomic policy settings.

Gross domestic product was expected to rise by 10.8 per cent year on year in the first nine months of the year, a mere 0.1 of a percentage point lower than the rise reported for the first half of the year, the National Development and Reform Commission said yesterday.

The rapid growth in the first half fuelled concerns that the economy could be overheating and raised the prospect of tightening measures, with top leaders including President Hu Jintao and Premier Wen Jiabao speaking in the past few days of the need to rein in runaway growth driven by excessive investment and credit.

The commission said economic growth would remain high, but begin to stabilise in the third quarter. It projected that growth in capital spending was likely to slow in the third quarter as a result of tightening measures put in place in the past few months.

Nationwide fixed-asset investment on items such as roads, other infrastructure and factories was likely to rise by 28.5 per cent year on year in the first nine months of the year, slowing from year-on-year growth of 29.8 per cent in the first half, the commission said.

China's trade surplus for the first nine months would reach US$100 billion, almost matching the record US$102 billion for the whole of last year and implying monthly surpluses in the third quarter of about US$12.8 billion. The nation's trade surplus posted a monthly record high of US$14.5 billion last month, taking the first-half total to US$61.4 billion.

The commission said it expected the consumer price index to rise by 1.7 per cent year on year in the third quarter.