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Last Updated: Wednesday, 6 September 2006, 09:54 GMT 10:54 UK
China growth forecasts rise again
Rolled steel in Guangzhou
China has lifted interest rates to try and cool investment
The Chinese economy is likely to grow even faster than previously thought this year, according to the Asian Development Bank (ADB).

The body has upped its forecast for China's growth rate to 10.4%, from its previous prediction of 9.5%.

China's growth shows no sign of slowing down despite government efforts to cool activity in areas such as construction.

Indian output is also set to exceed earlier expectations, with its economy now forecast to grow by 7.8% this year.

This is up from the 7.6% annual rise predicted in April.

'Strong performances'

In its latest update on the region's economy, the ADB said China and India would bolster developing Asia's growth as a whole in 2006, forecasts for which it has revised upwards from 7.2% to 7.7%.

But it warned that countries in the region needed to adjust more quickly to high oil prices and do more to stimulate investment.

Developing Asia's rapid growth is underpinned by strong performances by China and India
Ifzal Ali, ADB chief economist

In its own update on Tuesday, the Organisation for Economic Development (OECD) revised its growth forecast for the G7 countries upwards to 3%, but clipped Japan's growth projection from 2.8% to 2.5%.

The Chinese economy grew by 10.9% in the first half of 2006 against the same period a year ago, surprising many observers by its continued red-hot performance.

Beijing has sought to control the pace of growth by slowing public spending and limiting the availability of bank credit.

However, private sector investment has continued unabated while exports remain buoyant.

2007 forecast

The ADB has also significantly raised its 2007 economic forecast for China, now expecting growth of 9.5%, compared with its earlier prediction of 8.8%.

"Developing Asia's rapid growth is underpinned by strong performances by China and India," said Ifzal Ali, the ADB's chief economist.

"The outlook for Asian growth is quite positive as both domestic and external conditions remain favourable."

Elsewhere in the region, the ADB said it expected Pakistan and Bangladesh to grow faster than first forecast due to healthy exports, and it also raised its growth estimates for Singapore, Sri Lanka, the Philippines and Afghanistan.

However, it said political uncertainty in Thailand ahead of expected elections next month had caused it to downgrade its forecasts.

For 2007, the ADB is now forecasting growth across the region of 7.1%, compared with the 7% outlined in April.




SEE ALSO
OECD sees Europe's economy strong
05 Sep 06 |  Business
Profits soar at China's top firms
04 Sep 06 |  Business
China ups rates to cool economy
18 Aug 06 |  Business
China's industrial output soars
15 Aug 06 |  Business
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27 Jul 06 |  Business

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