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China GDP growth expected to rebound to 7.8 pct in Q3, BOC

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2013-06-28 GMT+8:00

BEIJING, June 27 (Xinhua) -- China's GDP growth is expected to remain weak in the second quarter but will rebound to 7.8 percent in the third quarter of this year, according to the forecast of the Bank of China (BOC).

The bank said that economic indicators in April and May, including investment, exports, PMI and industrial output, reflected the economy was facing rising downward pressure.

It predicted the country's economy to grow 7.6 percent in the second quarter, lower than the 7.7 percent in the first quarter. In view of the slowing economic expansion,China should guard against possible risks, such as worsening employment, shadow-banking, local governments' debts and rise in bad loans, said the bank.

It expected the economic growth to rebound to about 7.8 percent in the third quarter. Energy and raw materials prices declines, companies' operation difficulties, and financial market volatility would bring uncertainty for the economic rebound, said the bank. But it said that the acceleration of urbanization and the recovery in consumption and exports would support the economy to rebound at a mild pace.

The bank expected the inflation would remain at low level in view of the slow economic expansion. According to its prediction, China's consumer price index (CPI) would rise 2.3 percent year on year in the second quarter, lower than the 2.4 percent growth in the first quarter. In the third quarter, the CPI would grow 2.4 percent and the increase for the whole year would be under 3 percent.

In short term, it was unlikely to see a breakdown in the financial chain linking the shadow banking, local governments' debts and property market, said the bank.  (Edited by Jiang Yujuan, jiangyj@xinhua.org)

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