BMI Revises 2009 Growth
Forecast Up To 8.1%
BMI View: Stronger than expected real GDP growth in Q209, driven primarily
by government-led investment, has forced us to revise up our 2009
growth forecast. With the global economy forecast to continue on the
path to recovery in the second half of the year, we are now expecting real
output to expand by 8.1%, having previously forecast a 6.8% expansion.
Meanwhile, we have also revised up our 2010 growth forecast for China,
from 7.6% to 8.8%. Having said this, we continue to caution that runaway
liquidity growth poses a significant downside risk to growth.
In a sign that suggests that Beijing’s
stimulus efforts are increasingly taking
effect, China’s real GDP staged an
impressive rebound in Q209 to expand
by 7.9% year-on-year (y-o-y), as compared
to 6.1% growth registered in the
previous quarter. This dragged growth
for H109 up to 7.1% y-o-y and, with the
global economy forecast to continue on
the path to recovery in the second half
of the year, has consequently forced
another upward revision of our 2009
growth forecast. Having previously
projected real output to expand by
6.8% in 2009, we are now expecting
growth of 8.1%. Moreover, given our
forecast that the global economy will
grow by 1.7% in 2010, having shrunk
by an expected 2.5% in 2009, we have
also revised up our 2010 growth forecast
for China, from 7.6% to 8.8%.
Underscoring our more bullish
view on China, industrial production