China's 2015 GDP growth forecast at 6.8%

China's 2015 GDP growth forecast has been maintained at 6.8 percent, as further policy support and export recovery is expected to help bolster the sluggish economy. [Asianewsphoto by Zhang Guorong]

BEIJING - China's 2015 GDP growth forecast has been maintained at 6.8 percent, as further policy support and export recovery is expected to help bolster the sluggish economy, said UBS on Monday.

"December and Q4's better than expected data will unlikely trigger any immediate significant new easing measures for now, but the first rate cut may happen (around) March or April, when even lower CPI (consumer price index) and PPI (producer price index) are reported," said Wang Tao, chief China economist with UBS, said in a research note.

Wang added that policy support will intensify in 2015 with accelerated pro-growth measures in areas such as price, social safety net and hukou (household registration) reform, and more infrastructure projects.

Further monetary easing via liquidity provisions, including required reserve ratio cuts, is expected to offset slower foreign exchange reserve accumulation and benchmark rate cuts of at least 50 basis points (bp) are also expected to prevent real rates from rising, according to UBS.

UBS forecast Q1 2015 gross domestic product (GDP) growth would weaken further sequentially, weighed down by the ongoing weakness of property construction and infrastructure related funding issues.

The economy is expected to pick up in Q2 as funding issues are resolved and policy uncertainties are reduced when the National People's Congress (NPC) meet in March to release key polices related to the issue.

China's GDP grew 7.4 percent in 2014, its weakest expansion in 24 years.

Related story:

China's economic growth to stabilize by Cheng Yingqi

China's economy is likely to stop falling and begin to stabilize with a predicted 7.2 percent GDP growth in 2015, according to latest forecast report released by the Chinese Academy of Sciences on Friday.

The report, the 2015 China Economic Forecast and Outlook, was published by the Center for Forecasting Science under the Chinese Academy of Sciences. The annual report focuses on China's major economic indicators.

According to the report, steady economic growth in 2015 is to be expected, though the GDP growth rate is still predicted to drop by 0.2 percentage points from that of 2014.

China's GDP growth rate has been on continuous decline since 2010, and had drooped to 7.4 percent in 2014, reaching the lowest record in 24 years, according to the National Bureau of Statistics.

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