China's growth to slow further next year: Asian Development Bank, Latest Business News - The New Paper

China's growth to slow further next year: Asian Development Bank

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BEIJING : China's economic growth will ease further next year due to slowing exports and trade tensions with the United States, the Asian Development Bank (ADB) warned yesterday.

The bank is now forecasting 6.2 per cent growth in 2019 and 6.0 per cent in 2020, a downgrade on its April predictions.

"Domestic consumption will be the main driver of growth going forward with the main downside risk stemming from a potential intensification of the trade conflict with the US," said ADB chief economist Yasuyuki Sawada.

More monetary and fiscal support are likely from the government, said the ADB.

Earlier this month the State Council, China's Cabinet, announced a total of 2.15 trillion yuan (S$416 billion) of new special bond issues will be issued by local governments by the end of this month.

"We expect to see continued fiscal policy support into 2020," said ADB senior economist Jian Zhuang.

The government will increase the use of local government special bonds to push up infrastructure investment, but ADB analysts warned that containing debt would become more challenging over time as local governments have high spending needs but a weak revenue base.

The ADB also said Developing Asia, a group of 45 countries across Asia and the Pacific, will likely grow 5.4 per cent this year and 5.5 per cent next year, down from the 5.7 per cent and 5.6 per cent growth forecast in July.

South-east Asia is also expected to end 2019 on a weaker note, with growth likely to slow to 4.5 per cent compared with a previous forecast of 4.8 per cent and from last year's 5.1 per cent.

Growth next year is seen picking up to 4.7 per cent, but still lower than the 4.9 per cent estimate in July. - AFP, REUTERS