(COMTEX) A: CHINA FORECASTS 8.2PCT GROWTH RATE 1H 1999
A: CHINA FORECASTS 8.2PCT GROWTH RATE 1H 1999
BEIJING, May 20, 1999 (Asia Pulse via COMTEX) -- China is expecting an
8.2% economic growth rate for the first half of this year, with a GDP
of 3.66 trillion yuan ($US442 billion), the State Information Center
(SIC) says.
In a report in the China Securities daily on May 19, the SIC said the
prediction was based on an analysis of the government's macro-economic
policies and general economic development trends.
Primary industry, which includes agriculture, forestry, animal
husbandry, fisheries and water conservation, will remain stable with
3.5% growth in the first half, according to the report.
Industrial added value will increase by 9.7% to 940 billion yuan, light
industry will grow by 9.5% and heavy industry by 9.9%, with faster
growth than for last year.
Greater fixed asset spending by the government will boost growth in the
construction sector to 10% on an annual basis, analysts say.
The service sector will have slow but continued growth, considering
sluggish domestic consumer spending and a bearish stock market in the
wake of the Asian financial crisis.
For these reasons, economists predict 7.2% growth, more or less the
same as for 1998.
Fixed assets spending by the state will amount to 705.2 billion yuan
for the January-June period, a 21% jump on a year-on-year base, the
report says.
The period will also see slow growth in foreign trade and a decline in
the trade surplus.
Economists predict that foreign trade will be worth $US153.3 billion,
with a trade surplus worth $US15.5 billion, $US7 billion dollars less
than for the same period last year.
The report says that market prices will continue to edge down, but that
the large increase in fixed asset spending will gradually take effect,
reversing the downward trend in prices.
The retail price index is expected to drop by 2.8% for the period,
while the consumer price index will be down 1.4%.
The monetary policy will be important in the second quarter.
In the first half of the year, the M2, or broad money, will reach 11.2
trillion yuan, up 18.5%, and the M1, or narrow money, will reach 3.884
trillion yuan, up 15%.
The report suggests that the central government take steps to boost
economic development such as continuing proactive financial and
monetary policies and further interest cuts to find effective ways to
increase exports and consumer spending.
There will be lower economic growth in the second half and the
government has been warned it should pay a great deal of attention to
this.
(XIC)
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(C) 1999 Asia Pulse Pte Ltd
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