China’s growth outlook for 2012 was slashed to 7.7%, a sharp downgrade from 8.2% projected by the World Bank in May as economic slowdown continues.
AFP reports that the World Bank’s growth forecast for the region plunged to 7.2% on Monday, dragged by China’s languishing economy – the worst in 13 years. The country’s GDP declined to 7.6% from 9.3% in 2011, held back by weak exports and lower investment growth, the Financial Times reports.
“China’s slowdown this year has been significant, and some fear it could still accelerate,” a new World Bank report says. “The risk remains of a more pronounced slowdown in China than currently expected.”
Still, the risks of a “hard landing” are relatively small, with looser monetary policy and accelerated approvals for investment projects to bounce back from, the World Bank says. Current predictions are that the Chinese economy could rebound to 8.1% in 2013. World Bank chief economist for East Asia and the Pacific Bert Hofman told AFP that the region’s growth is expected to recover to 7.6% next year, driven by domestic demand. Growth rates in East Asia are “still the envy of many in the developed world,” Hofman said.