BOFIT Forecast for China 2011-2013

Supported by a set of fiscal stimuli geared to promote investment, China was able to continue its rapid economic growth during the international financial crisis. In 2010, the Chinese economy grew by 10.3%. Owing to massive credit extension fuelled by the fiscal stimuli as well as inflationary pressures fed by rising food and commodity prices, Chinese economic policy has shifted in focus to curbing inflation via monetary tightening. As a result, growth in real GDP is expected to slow down to 9% in 2011 and to 8% in 2012-2013. In the forecast period, in addition to the recent uncertainties in the world economy, inflationary pressures and problems in the real estate sector are the greatest immediate risks to balanced economic development.