China Government researcher sees GDP up 9% in 2011

Reuters - China’s gross domestic product is likely to rise about 9 percent in 2011, showing a slow-down from an estimated growth of 10 percent this year, a senior researcher at a government think tank said in remarks published on Sunday.

Liu Shijin, a deputy director of the Development Research Center under the State Council, the cabinet, said China’s economy would slow to a moderate pace in the coming three to five years, citing challenges from rising labor costs, excess liquidity and difficulty in finding a new source of growth.

China’s economy grew 10.3 percent in the second quarter of this year after a rise of 11.9 percent in the first quarter, in what the government described as an expected moderation resulting from targeted structural adjustment.

But Liu sounded an optimistic note on the slowing pace of economic growth.

“Actually, we don’t have to be too worried about an economy with moderate expansion,” the official Xinhua News Agency quoted him as saying at a forum. “Because the current economic growth is too high for China.”

Liu warned that the easing monetary policy taken by the Federal Reserve would further weigh down the dollar and put pressure on other non-dollar currencies, including the yuan, to appreciate in the future.

Rich economies are introducing a fresh round of quantitative easing, fuelling speculation that rampant liquidity could be channeled to emerging markets.

He added that China’s economic stimulus package also injected excessive liquidity into the market, pushing up prices of commodities, equities and other land-related assets or resources.

China’s exports and investments would be much better in 2011 than this year, but the growth rate of consumption would pull back slightly from this year’s boom, Liu added.

India’s growth to moderate next fiscal year

Reuters- India’s economic growth is on track to accelerate in 2010/11 on the back of monsoon rains but expectations for growth in the following year have moderated slightly, a quarterly Reuters poll shows.

Analysts raised their expectations for how far the Reserve Bank will lift rates in the fiscal year to the end of March 2011, reflecting signs that demand pressures, especially for consumer durables, are building in Asia’s third-biggest economy.

A survey of 21 economists produced a median forecast that the economy would grow 8.4 percent in the year ending March

2011, unchanged from a similar poll conducted in July and up from growth in 2009/10 of 7.4 percent.

They projected growth of 8.3 percent in 2011/12, slightly below 8.5 percent forecast in July.

“Rising cost pressures and global uncertainties are likely to have a sobering impact on India’s growth momentum,” said Rupa Rege Nitsure, chief economist at Bank of Baroda.

Wholesale price inflation is forecast at 8.3 percent at the end of 2010/11, similar to current levels, before moderating to

5.7 percent the following year. This compares with 8.6 percent and 5.5 percent, respectively, in the previous poll.