|Growth has declined somewhat in 2014 amidst the on-going property market correction and the resulting weak demand in upstream industries. The authorities have adopted a series of measures to support growth, and investment in infrastructure and social housing is expected to accelerate to meet urbanisation needs. Growth is projected to continue to edge down in the next two years, to around 7%. The current account surplus is set to widen somewhat to about 2¾ per cent of GDP.
The slowdown is expected to reduce imbalances, and not jeopardise job creation, which remains buoyant as the service sector expands. Indeed, attempts to spur growth would only draw out the correction process and aggravate already high leverage, misallocation of capital and accumulation of bad debt. Implicit guarantees should be removed and small firms should be subject to more rigorous reporting and disclosure requirements to enhance their access to bank credit.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.