China has forecast that it will grow at 7.9% this year, the highest growth rate in a quarter-century, and the fastest since 2010, the central bank said on Tuesday.
The world’s second-largest economy also plans to expand at 7% in 2019, a month after the country’s central bank issued its first « bullish » economic outlook since mid-2016.
The central bank also forecast growth in 2021 of 7.4%.
China’s economic growth rate is expected to reach 7.5% in 2021, the first time it has done so in the last four years, it said.
It also said it expects the economy to expand 6.5%-7% this fiscal year, and 7.6% in 2022.
In the coming months, the yuan will weaken to a record low against the dollar, and that will push up the cost of imports, which will increase consumer prices, it added.
« We expect the yuan to weaken against the euro in coming months and then to strengthen, strengthening the Chinese export sector, » said Li Xiaofeng, a senior fellow at the Peterson Institute for International Economics.
« The impact of the weakening yuan will be larger than the impact of deflationary pressure, » he added.
The yuan is currently trading at $1.904.
The global benchmark is trading at more than $1,000, its highest level since the global financial crisis.
China’s central banks have kept interest rates low to stimulate the economy.
The yuan is viewed as a safe-haven currency by foreign investors.
The U.S. dollar weakened 0.1% against a basket of major currencies and remained at about $1 to $1 .0670.