The World Bank report predicts China's deficit this year or reach gdp5%

China's economic growth in the next two years will continue to be substantial, but it is too early to start a sustained and robust recovery, the World Bank said in a recent China quarterly report in Beijing yesterday.　　According to a World Bank study, China's revenues this year will fall by 5% per cent and fiscal spending by 22%, meaning that the annual deficit will reach almost 5% of GDP. GDP growth rose to 7.2% per cent this year, with China's gross domestic product growth forecast up to 7.2% in 2009, 6.5% in March and 2010 to 7.7%.　　In the 7.2% growth rate this year, an estimated 6% of the increase comes from the government's impact on spending and the stimulus from lower taxes. Ardo, China's chief economist for the World Bank, said the government's investment in China this year and next will strongly support 2009 years of growth.　　But the extent to which China can be different from global growth, based on the growth of government spending, is limited.　　Because of the overcapacity in many manufacturing sectors and the squeeze in corporate profit margins, market investment will remain sluggish for some time; the outlook for the real estate industry looks pretty good, but consumption growth is unlikely to accelerate quickly. "China's fiscal deficit is likely to be much higher than the budget this year," said Kuijs, a senior economist at the China Economic Quarterly report. "It is neither necessary nor appropriate to add more traditional stimulus measures in 2009." Adding stimulus measures now would reduce the space for stimulus measures in 2010. "The growth of foreign exchange reserves will be slowed by capital outflows, and the pace of accumulation of China's foreign exchange reserves has slowed sharply."　　The World Bank expects foreign exchange reserves to grow at $218 billion trillion this year, the smallest increase since 2005, compared with $419 billion in 2008 and $462 billion in 2007. This is mainly under the capital account, the bank expects China's outflow this year will be as high as $170 billion trillion, far more than 2008 years of 7 billion U.S. dollars, including foreign investment, profit return and hot money outflow and other factors.