China GDP growth seen 7 pct in Q2: government think-tank

SHANGHAI (Reuters) - Chinese annual economic growth will rise to 7 percent in the second quarter, a key Chinese government think-tank said in a report published on Monday, up from the first quarter's 6.1 percent. The State Information Center also said in a report published in the official China Securities Journal that China would continue an appropriately loose monetary policy but that record loan growth was not sustainable.

The report also forecast that the Chinese consumer price index would show an annual decline of 1.3 percent in the second quarter.

It pegged industrial output growth at 7.1 percent, while exports were seen falling 20.2 percent and imports were seen down 25.5 percent.

The report said the Chinese economy was not yet on solid enough footing to stabilize and recover.

In calling for continued pursuit of a loose monetary policy, it added that China should continue to make rational adjustments in its interest rates and banks' required reserve ratios, while making flexible use of open market operations and maintaining ample liquidity in the money markets.

(Reporting by Edmund Klamann; Editing by Jonathan Hopfner)