The influential China Academy of Social Sciences (CASS) has joined other mainland think-tanks in making an upbeat forecast of economic growth for this year. In its spring forecast the body said gross domestic product would rise by 7.5 per cent this year, up from 7.1 per cent last year, with the benchmark retail price index falling 1 per cent, the third successive year of deflation. The less widely followed consumer price index, which measures a wider range of goods and services, is tipped to rise 0.6 per cent, after two years in negative territory. Presenting an upbeat picture, the report predicted a trade surplus of US$30.5 billion, made up of exports rising 8.6 per cent to US$211.5 billion and imports up 9.3 per cent to US$181 billion. It sees retail sales rising 9.2 per cent, up from 6.8 per cent last year. The gap between city and country will further widen, with urban incomes rising 7.1 per cent and rural ones only 3.8 per cent. Personal bank savings will rise 12.5 per cent to 6.7 trillion yuan (about HK$6.26 trillion), compared with an increase of 11.6 per cent last year. The main black spot is a budget deficit that will reach a record 223 billion yuan, largely as a result of pump-priming measures by the government to make the economy grow faster. Experts at a seminar on Friday to discuss the report were divided on whether it means the economy has turned a corner. Liu Guogang, a CASS economist, was optimistic, saying that the economy will bottom out this year thanks to the government's stimulus measures, strong growth in the world economy and Beijing's expected World Trade Organisation entry. But Wang Yida, of the Ministry of Finance, said it was too early to speak of a turning point. 'Investment by the non-state sector has not picked up, and consumer and export demand remains weak. Can improved profitability by companies be sustained over the long term?' Mr Wang said. Wan Cunzhi, of the People's Bank of China, said GDP growth this year was likely to be between 7.2 and 7.5 per cent. 'Company performance may be getting better, but indices of bank loans are not ideal. State firms have done better because of man-made, policy and external factors. Seven cuts in interest rates since 1996 have saved them 250 billion yuan in interest. But this improvement lacks a solid base,' he said. Members of the public greeted the figures with their usual scepticism, saying they were too rosy and doctored to meet the needs of national leaders demanding growth of at least 7 per cent. 'The number of unemployed is rising,' said one taxi driver. 'Only Beijing and other major cities pay the basic monthly living allowance that the unemployed are supposed to receive. In the rest of China, local governments have no money and pay. 'Few people want to spend. We all fear unemployment, the cost of buying a home and paying for our pension and medical insurance.'