China's economy will see a strong recovery in the second quarter as the government stimulus package pays off, according to a survey of leading Chinese economic institutes.
The poll of 27 economic institutes by Capital Week, a weekly magazine specializing in securities and investments, showed that the institutes had raised their growth projections for China's economy in the second quarter by an average of 0.51 percentage points to 7.01 percent.
The average forecast of China's annual gross domestic product (GDP) growth had also been raised to 7.84 percent, compared with 7.77 percent three months ago, according to the survey.
China's quarter-on-quarter GDP growth rose to 1.8 percent in the first quarter this year from 0.2 percent in the previous quarter, which was "almost back to normal", said Zhu Jianfang, chief macro-economist of Citic Securities, one of the surveyed institutes.
Zhu said more favorable policies on living standards, employment and consumption should be implemented, as stimulation of investment might not improve employment, which is seen as one of the toughest tasks of the year.
Several foreign banks also raised their forecasts on China's economy for 2009 in recent reports. Goldman Sachs last week revised its prediction for China's GDP growth this year from 6 percent to 8.3 percent after the release of strong economic data in the first quarter.
Switzerland's largest bank, UBS, adjusted its estimate of China's GDP growth to 7 or 7.5 percent this year from 6.5 percent, while Morgan Stanley raised its forecast to 7 percent from 5.5 percent.
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