World Bank raises China outlook

China's economy grew 6.1 per cent in the first quarter, the strongest rate of any major country [EPA] The World Bank has said China's economic growth this year may be stronger than previously expected. The bank raised its growth forecast from 6.5 per cent to 7.2 per cent on Thursday, crediting China's stimulus-driven investment boom. But it also cautioned that it was too soon to say whether a sustained recovery was on the way. Beijing's four trillion yuan ($586bn) stimulus programme, that pumps money into the economy mostly through higher public works spending, will "strongly support growth", the bank said in a quarterly report. "Growth in China should remain respectable this year and next, although it is too early to say a robust, sustained recovery is on the way,'' Ardo Hansson, the bank's lead economist for China, said. China's economy grew 6.1 per cent in the first quarter from the same time last year, below the government's 2009 target of eight per cent and far from 2007's explosive 13 per cent, but the strongest rate of any major country. Limits to growth But the bank cautioned that there was a limit to how much China could buck global trends through stimulus spending while exports are weak. "There are limits to how much and how long China's growth can diverge from global growth based on government-influenced spending," the bank report said. It forecast that trade and private investment would remain weak, consumption would slow and a fully-fledged recovery would have to wait for the global economy and demand for exports to rebound. Thursday was the first time the bank has raised its outlook for China since November, when it slashed its 2009 forecast from 9.2 per cent to 7.5 per cent. The bank cut that again in March to 6.5 per cent. The bank predicted growth in 2010 would rise to 7.7 per cent.