Beijing, China, September 26, 2005 -- China's booming economy is expected to grow 9.2 percent this year and 8.7 percent in the first half next year, according to researchers at the People's Bank of China, the official Shanghai Securities News said.
The forecasts compare with a 9.5 percent growth rate in 2004 and 9.5 percent in the first half of this year.
The newspaper said the researchers also see the consumer price index (CPI), a broad measure of inflation, rising two percent this year and 2.1 percent in the first half of 2006.
That compares with a 3.9 percent increase in inflation last year and 3.6 percent in the first half of this year.
"We must closely watch the impact of surging oil prices on the international market but also prevent a further fall in overall prices in the country," the research report said, referring to the threat of deflation.
Central bank researchers said CPI growth has declined since March, slipping to a 1.3 percent year-on-year increase in August, the newspaper added.
The continuous fall is mainly due to a sharp slowdown in rises in food prices, weakening consumer demand and overcapacity as government efforts to cool the economy start to take effect, the report said.
The PBoC researchers attributed the expected decline in CPI to a slight fall in grain prices, adding that ongoing reforms to China's foreign exchange mechanism will also help keep prices stable.
Economists have warned that China's rapid economic growth will possibly slow down or even lead to deflation, whereby prices fall steadily, in the coming years.
