One day after China's central bank announced its biggest interest rate cuts in a decade, a key Chinese government think-tank, the State Information Center, predicted China's GDP (Gross Domestic Product) growth will slow to 8 percent in the fourth quarter of 2008, from the third quarter's 9 percent.
According to the report from the State Information Center, China's economic growth in the fourth quarter is expected to contract further, while the CPI (Consumer Price Index) is projected to slide down to 3.8 percent from 6.1 percent in the previous quarter.
The impact of the Chinese government's 4-trillion-yuan stimulus package has yet to be felt in the fourth quarter this year, the report explained.
The decline in manufacturing activities is the key factor contributing to the slowdown in 4th quarter GDP growth, the state think-tank said. However, the report predicted China's export industry will continue to grow at a rate of 17% in the fourth quarter. And China's trade surplus is also expected to hit a new record of $273 billion this year, slightly higher than previous year's $262.2 billion.
The report pointed out that with raw material prices declining and the government's efforts in raising agricultural products supply, Chinese consumers will no longer face the threat of sharply rising prices as they did in the first three quarters of this year.