China sees solid growth, low inflation in '06
BEIJING, Nov 20 (Reuters): China is set for another year of robust growth and low inflation in 2006 but excessive investment is a risk, the country's top statistician said today.
Yao Jingyuan, chief economist at the National Bureau of Statistics, said the underlying momentum of the economy was strong and gross domestic product would grow by more than 9 per cent this year and by 8 to 9 per cent in 2006.
Speaking at an economics forum, Yao said consumer price inflation, after averaging about 2 per cent this year, would remain benign in 2006.
Peking University economics professor Justin Lin told the forum Saturday that China could relapse into the deflation that plagued the economy as recently as 2002.
However, he said inflationary pressure, which has eased thanks to falling grain prices, would remain muted next year.
One of the main reasons economists expect inflation to stay low is that breakneck investment in recent years has led to oversupply in many sectors, robbing producers of pricing power.