China's economy will not be affected by the global slowdown, and a rebound to 10.8 percent growth is expected in the second quarter, from 10.6 percent in the first quarter, the State Information Center said yesterday.
Inflation will come down to 7.5 percent, from 8 percent in the first three months, but the producer price index will remain high at 8.1 percent for April to June, economists at the think-tank wrote in the state-run China Securities Journal yesterday.
"With the first quarter behind us, China's macro picture has become clearer: with a soft landing in sight," said Qing Wang, China economist at Morgan Stanley.
The statistics bureau is to release the country's April figures next week, with economists expecting inflation to be as high as 8.5 percent.
For this quarter, Lehman Brothers estimates the GDP will expand 10.8 percent with consumer prices rising an average 7.8 percent.
Consumer prices in March rose 8.3 percent.
The Information Center, a think- tank affiliated with the National Development and Reform Commission, is optimistic that fixed direct investment may gain momentum in the second quarter, rebounding from the effects of the worst snowstorms in 50 years in January and February.
Taming inflation remains the top priority for Beijing against pressure from rising import and producer prices, according to the center's report.
More tightening measures are in the pipeline, say economists. "The reserve requirement ratio [for banks] could rise to 17 percent and the yuan could reach 6.3 against the US dollar," said JPMorgan China economist Grace Ng.
Slowing external demand and faster yuan appreciation will be "more obvious" on exports this quarter, said the Information Center, and it expects export growth to slow to 20 percent, from 21.4 percent in the first quarter.
