The World Bank has reduced its projected growth for China this year to 9.6% from the 10.8% originally announced in September, citing greater downside risks in the current climate of global economic uncertainty. It also revised upwards the expected inflation rate, from 3.8% to 4.6%, Reuters reported. However, Louis Kujis, the World Bank’s senior economist, said China’s strong domestic economy – including high profitability and rising consumption – meant it was well placed to absorb a moderate global slowdown. Although it is feared that inflation could top 7% in January and February due to food shortages created by the severe winter weather, the bank expects inflationary pressure to ease later in the year. It expects China’s current account surplus to fall to 9.3% of GDP in 2008 from an estimated 11% last year. This suggests the trade surplus may grow at a slower pace.
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