China's economy will grow around 6.5% in 2017; yuan to continue falling: CASS Researchers

Picture illustration taken in Beijing shows Chinese 100 yuan banknotes. Image Source: Reuters

China`s economy will grow around 6.5% in 2017, while the yuan will continue to fall, government researchers said in Beijing on Monday.

The China Academy of Social Sciences`(CASS) GDP forecast comes after China`s top leaders held a key meeting on the economy last week, where they vowed to keep China on a path of stable and healthy growth next year.

China`s economy has grown at 6.7% for the first three quarters of 2016 and is on pace to record the slowest growth rate in more than 25 years.

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The economy will grow 6.5% in the first and second quarters, and 6.4% in the third and fourth quarters, CASS said.

A key challenge will be stemming capital outflows amid a depreciating yuan, which has fallen more than 6% against the dollar this year.

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The yuan will depreciate against the dollar by another 3% to 5% in 2017, Ministry of Commerce researcher Jin Bosong said on Monday.

In yuan terms, China`s exports should grow 4% to 6% in 2017, with imports up 2% to 4%, Jin said.

CASS also forecast that consumer price inflation will be 2.2% in 2017 and producer prices will rise 1.6%. Consumer price inflation for the first 11 months of the year was 2.0%, while producer prices have fallen 2.0%.

Retail sales will rise 9.5%, while fixed asset investment will increase 8.9%.

CASS`s forecast in December 2015 for 2016 growth was 6.6% to 6.8%.

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