China will avoid a hard landing even as economic growth slows in the third quarter, Fitch Ratings said, after trimming its forecast for the full-year expansion of gross domestic product last month.
China’s third-quarter year-on-year GDP growth of 7.4 percent was in line with the rating company’s estimate of 7 percent to 8 percent for the years 2012 to 2014, Fitch said in a statement yesterday. Growth is slower than the 9 percent to 10 percent in 2008 to 2011.
Fitch cut its prediction for 2012 GDP growth to 7.8 percent from 8 percent in its September Global Outlook.
The current slowdown is less severe than the sharp drop after the global financial crisis of 2008, so modest fiscal stimulus and a strong labor market may bring China’s growth closer to 8 percent by year-end and to 8.2 percent in 2013, Fitch said.
Over the longer term, China needs to move away from over- reliance on investment toward consumption for more stable growth, Fitch said.
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