China’s Growth is Expected to Slow Modestly in 2012

The growth rate of China will slow modestly in coming quarters as a result of a slight decline in global demand for its exports, according to the emerging consensus of a survey conducted by Reuters among of economists.

The trend should help Beijing to control its inflation. The Chinese government may consider this slight slowdown as a sign that the economy is robust enough to withstand further monetary tightening.

GDP growth in the second world economy expected to slow to 9.2% in the third quarter, against 9.5% in the second.

Over the whole of 2011, the growth rate should be apparent to 9.3%, a particularly strong pace over the world average but slightly below the 9.5% anticipated in the latest quarterly survey, and even more that observed last year, 10.3%.

For 2012, the consensus anticipates a slowdown even clearer to 8.8% growth.

Annual inflation will slow to 4.3% in the fourth quarter, against an estimated 5.4% in the third.

Beijing’s campaign against inflation will soon enter its tenth month, many analysts believe that the monetary tightening cycle will soon end.

A small majority of analysts believe that Beijing might raise interest rates for the fourth time this year before a pause until June 2012.

Since October 2010, Beijing has raised rates five times, and the ratio of reserve requirements for banks nine times.