BEIJING, Oct 12: China’s economy will grow by 7.8 per cent or more this year, state media reported Saturday a government think tank as saying. The Chinese Academy of Social Sciences made the prediction in a report issued Friday, the Economic Information Daily said.

The academy attributed the growing economy to the government’s fiscal policies and to the continuing expansion in domestic demand. Foreign trade has also greatly increased, as has actual foreign direct investment.

The academy predicted that in 2003, barring any unexpected international or domestic events or serious natural disasters, the economy would continue to grow at a rate of 7 per cent or higher.

The report offered three suggestions for maintaining future development: continue expanding domestic demand, combine raising residents’ income with overcoming deflationary pressures, and stepping up macroeconomic adjustments, which in the past have included issuing treasury bonds and cutting interest rates.

China’s economy grew 7.8 per cent in the first half of 2002, compared with the same period last year. The economy grew by 7.3 per cent last year.

Chinese officials have expressed increasing confidence in recent months that economic growth will exceed the government’s seven per cent target this year because of massive state spending and rising exports.—AFP