The Asian Development Bank (ADB) raised its outlook for China’s economic growth this year on the back of strong domestic consumption, an export recovery and solid growth in services.
ADB now expects China’s economy to grow 6.7 per cent in 2017, up from a previous projection of 6.5 per cent made in April.
The 2018 growth forecast was also raised to 6.4 per cent from 6.2 per cent, reports Reuters.
China’s economy has grown at a faster than expected 6.9 per cent pace in the first half of this year, on track to beat the government’s target of around 6.5 per cent despite Beijing’s efforts to curtail risky forms of investments and rising debt.
“The PRC economy remains resilient, solidifying its role as an engine of global growth,” said Yasuyuki Sawada, ADB Chief Economist.
“Supply-side reform is moving forward, but eventual success hinges on a careful balancing of the role of the market and the state, particularly as the country continues its transition to a more market and services-driven economy.”
ADB’s forecasts for China in 2017 and 2018 now match those of the International Monetary Fund, which upgraded its own China growth forecast in July.
But 6.7 per cent growth for the full year would still indicate a notable slowing over the second half of the year.
A cooling property market due to strong government controls and weaker exports growth could impact overall economic output in the second half, analysts say.
Indeed, August economic data suggested the world’s second-largest economy is finally starting to lose some momentum as borrowing costs rise.
