Friday, December 12, 2008
The prospect of deflation has reared its ugly head after mainland consumer prices fell sharply to a 2.4 percent growth rate last month from 4 percent in October.
Economists said the deflationary risks and the slowdown in economic activities inherent in the consumer price index data mean Beijing needs to launch more measures to revive confidence.
UBS forecasts the economy to bottom out by the end of next year. The growth rate will be 7 to 8 percent for next year and average 8 to 9 percent over the coming five years. Goldman Sachs revised down its growth forecast for next year to 6 percent from 7 percent.