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Chinese economy to improve in Q2 -govt economist

Published 04/23/2009, 08:49 PM
Updated 04/23/2009, 08:56 PM

BEIJING, April 24 (Reuters) - China's economic growth will clearly improve in the second quarter, boosted by increasing investment and a slower deterioration in exports, a leading government economist said in remarks published on Friday.

Annual growth in gross domestic product slowed in the first quarter to 6.1 percent from 6.8 percent, but economists said this marked an improvement in sequential, quarter-on-quarter growth.

This trend will continue, according to Zhang Liqun, an economist with the Development Research Centre, a think-tank under the State Council, China's cabinet, as supply and demand come into better balance.

"We think the rate of decline in exports will continue to shrink," Zhang was quoted by the official China Securities Journal as saying.

Exports in March declined by 17.1 percent from a year earlier, improving from the 25.7 percent fall recorded in February. Zhang said he expected exports for all of 2009 to shrink 10-15 percent.

The pace of investment, which picked up sharply in the first quarter, will continue to gather momentum throughout the year, Zhang said, without giving any forecast.

Fixed-asset investment expanded 28.8 percent in the first three months compared with a year earlier as the first phase of Beijing's 4 trillion yuan ($585 billion) stimulus plan kicked in.

"After a period of preparation, we expect local governments will also speed up their investment," Zhang said.

The economist said he expected an improvement in overall domestic demand, driven in part by stronger car and real estate markets. (Reporting by Aileen Wang and Kirby Chien; Editing by Alan Wheatley)

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