China's economy is expected to expand 8.5 percent in 2009, and its growth will accelerate to 9.8 percent next year, an economist at Bank of Communications (BoCom) said on Saturday.
Lian Ping, chief economist at the fifth-largest bank in China, said strong growth in domestic demand had partially offset the drop in external demand in the first half of the year, and the trend will continue into the second half.
"In the second half, investment growth is set to accelerate, with consumption maintaining its upward momentum," Lian said. "China's export growth is slated to bottom out in the second half too," Lian told reporters in a media briefing.
The bank's current projection of China's gross domestic production (GDP) for 2009 is higher than its February's estimate of 8 percent. Major international agencies, such as the World Bank, have recently raised forecasts for China's GDP growth for this year.
China's export-oriented economy has been hit hard by the slump in overseas demand, but encouraging signs emerged in recent months. In July, China reported a 7.9 percent growth in GDP for the second quarter.
"Under the triple impacts of economy recovering, inflation expectation and hot money inflow, the rising pace of asset price would increase," he said.
Consumer prices in China are likely to turn positive in the fourth quarter, said Lian.
China's central bank said last week consumer prices were stabilising after months of declines and could bottom out at the end of the third quarter before rebounding.