Economy
HSBC raises China's 2010 GDP forecast to 10%
(Xinhua)
Updated: 2010-04-20 10:20
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HONG KONG: HSBC, one of the world's largest banks, Monday upgraded its 2010 growth forecast for China to 10 percent, from its original projection of 9.5 percent, which was made this January.
"Given the export turnaround, we raised our 2010 GDP growth forecast (for China) to 10 percent from 9.5 percent," the bank said in a quarterly report released by HSBC Asian Economic Research.
China has sustained strong growth momentum so far this year, with GDP growth in the first quarter accelerating to a two-year high of 11.9 percent, from 10.7 percent in the previous quarter.
China's industrial production growth jumped to 19.6 percent in the first quarter in 2010, the fastest pace since the series began in 1995, thanks to robust domestic demand and a faster-than- expected rebound in the export growth, said the report.
Strong exports could lift industrial production and create new jobs, supporting a quicker recovery in wages and hence boosting consumer spending, it said.
Frederic Neumann, a senior HSBC economist and co-author of the report, said recent Chinese economic data on exports and domestic demand suggested the world's third largest economy "is doing very well and perhaps starts to overheat a little bit".
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The National Bureau of Statistics said on April 15 that China's retail sales surged 17.9 percent year on year in the first quarter, and fixed-asset investment rose 25.6 percent, which indicated strong domestic demand.
China's exports in the first three months this year jumped 28.7 percent year on year to $316.2 billion, according to figures released by the General Administration of Customs.
On the policy front, the HSBC report said strong data in the first quarter this year was likely to prompt more decisive steps towards unwinding fiscal stimulus on new infrastructure projects and tightening credit to contain the risk of overheating.
