OECD revises up China's economic forecast

The Paris-based Organization of Economic Cooperation and Development (OECD) forecasts that China's economy would grow at a rate of 9.3 percent in 2005 and 9.4 percent in 2006.

The projection has been made public in OECD's Economic Outlook published on Nov.29. It is higher than its previous forecast of 9 percent and 9.2 percent for this year and next year, which was declared in September.

The Economic Outlook says that the external demands keep China's economy on a fast track in 2005. The US and EU restrictions on imports of Chinese textile products have very limited impact on the country's economy.

China's output growth, says the report, will stay well above 9 percent in the OECD's projection period. And the growth will be likely to be mainly driven by domestic demands. The OECD even expects a 9.5 percent growth for China's economy in 2007.

The report believes the investment frenzy in China will continue in the following months. In addition, China will import more due to its brisker domestic demands and slightly stronger yuan. The report suggests a further appreciation of the Chinese currency.

It also predicts that the inflation in China will be down to under 4 percent.

By People's Daily Online