World Bank Raises China 2009 Growth Forecast to 7.2 pct

World Bank Thursday raised its forecast of China's economic growth rate to 7.2 percent in 2009 from its earlier forecast of 6.5 percent, as the country's expansionary fiscal and monetary policies have kept the economy growing respectably.

It projects the gross domestic product (GDP) growth of the world's third largest economy to reach 7.7 percent in 2010 in its China Quarterly Update report released in Beijing on Thursday.

"Growth in China should remain respectable this year and next, although it is too early to say a robust sustained recovery is on the way," said Ardo Hansson, World Bank's Lead Economist for China.

The Update, a regular assessment of the Chinese economy, finds that the fiscal stimulus is centered on the 4-trillion yuan (585 billion U.S. dollars) stimulus plan while the monetary stimulus has led to a surge in new bank lending.

"Positive signs have emerged in the real estate sector. Consumption has held up well. Very weak exports have continued to be the main drag on growth, while import volumes have recovered in the second quarter this year as raw material imports rebounded," said the report.

Global growth prospects remain subdued even as signs of stabilization have emerged. Financial markets have become less strained and there are prospects for stabilization of activity. However, a rapid global recovery seems unlikely and uncertainty remains, according to the report.

The Asian Development Bank (ADB) forecast in a March report that China's economy might expand by 7 percent this year.

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