BEIJING: China's economy is set to grow 7.6% in 2013, beating the government's 7.5% target, before losing some steam next year as the government forges ahead with structural reforms, a Reuters poll showed.
Growth for 2014 may come in at 7.4%, according to the median forecast in a poll of economists conducted between Oct 18 and Oct 22.
The forecasts were little changed from a Reuters poll in July, when economists had predicted growth of 7.5% for both this year and next.
While an expansion of 7.6% in 2013 year would be the weakest in 24 years, it would still be comfortably above the government's 7% bottom line for annual economic growth.
"A renewed economic slowdown over the next few months is looking increasingly likely. This might reawaken fears of a hard landing. But as long as it was the result of slower growth in credit, it would be a welcome development," Mark Williams, an economist at Capital Economics, wrote in a research note.
Growth is likely to stabilise at 7.5% in the fourth-quarter of 2013 from 7.8% in the previous three months, and maintain that level into the second quarter of 2014, according to the poll.
Beijing has repeatedly said it would accept slower growth as it tries to wean the economy off dependence on investment and exports in favour of domestic consumption, but such rebalancing has been proceeding gradually.
The uptick in third-quarter growth, the second increase in the previous 10 quarters, came thanks to a "mini-stimulus" from the government in July, which saw increased investment and assistance to the trade sector.
There were signs, though, that these measures were already beginning to lose their potency towards the end of the third quarter, as factory output and retail sales growth eased in September.
Economists say soft global demand for Asia's exports will remain a risk for the Chinese economy in the coming months.
"I don't think external demand is likely to pick up meaningfully in the next few months," said Qu Hongbin, an economist at HSBC. "We see better numbers from the US but we also see slowing in emerging markets."
China's consumer inflation rose to a seven-month high of 3.1% in September, still below the official target of 3.5% for the whole of 2013.
The poll showed that consumer inflation may pick up to 3.1% in 2014, from an expected 2.7% in 2013. The previous poll in July put inflation next year at 3.3% from an expected 2.6% in 2013.
The poll also showed economists believe China's central bank is likely to keep benchmark interest rates unchanged in the next year-and-a-half, while the required reserve ratio for banks should remain the same for most of next year, with a chance of a reduction in the final quarter of 2014.
China's central bank last week pledged to uphold its prudent policy with timely fine-tuning, while blaming capital inflows for much of the recent credit expansion.
A policy adviser to the People's Bank of China told Reuters on Tuesday the authority may tighten cash conditions in the financial system to address inflation risks – Reuters.