Beijing, China (4E) – The Organization for Economic Cooperation and Development (OECD) said China’s economy will accelerate in 2013 and 2014, weathering the fragile global recovery.
The OECD estimates gross domestic product (GDP) will grow 8.5 per cent in 2013 and 8.9 per cent in 2014, higher than the forecast of the International Monetary Fund (IMF) of 8.2 percent in 2013 and 8.5 per cent in 2014.
The group said that the world’s second-largest economy could benefit from the rising demand for housing and improving business investment, even as export growth continues to stay subdued.
The new leadership under Premier Li Keqiang faces the major challenge to sustain the recovery coming from the weakest economic growth in 13 years while putting curbs on property and consumer prices.
The OECD acknowledges its growth forecast may be too high given the risk from price pressures, especially in the property sector. The group prescribes easing of restrictions on land supply as a measure to prevent strains in the sector.
China’s GDP rose 7.9 percent in the final three months of 2012, rising for the first time in the last two years. Last year’s full-year growth of 7.8 percent was the slowest since 1999.
The OECD also increased its forecast for inflation, expecting that the consumer price index to climb 2.7 percent in 2013 and 2.9 in 2014, compared to an earlier estimate of 1.5 per ent in 2013 and 1.4 per cent in 2014, which was released in November.
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