China’s economic growth will slow to a 13-year low in 2012, according to new figures released by the World Bank.
The World Bank predicts that Chinese economic growth will shrink to 8.2 percent this year down from 8.4 percent last year, due to efforts to slow overheated growth by the government and to the continuing economic crisis in key export markets such as Europe.
In 2010, Chinese growth was over 10 percent – a figure which prompted officials to boost consumption and decrease reliance on exports in order to achieve more sustainable growth.
“Cyclical weakness is expected to dominate the near-term outlook,” the bank said in the report, according to the Wall Street Journal.
Despite the world’s second largest economy forecasted to shrink unexpectadly, the World Bank said that prospects for a soft landing remain high, particularly as China has worked to mitigate a domestic property bubble fueled by speculation.
Beijing has worked to temper its super economic growth to more sustainable levels in recent years without pushing the economy into recession.
Bloomberg said that the World Bank suggested that China should increase fiscal spending to spur consumption while easing reserve requirements for banks to allow more credit into the economy.