China data to show growth recovery, higher inflation: Reuters poll

BEIJING Wed Dec 5, 2012 9:02pm EST

An investor chats with others in front of an electronic board showing stock information at a brokerage house in Taiyuan, Shanxi province, December 5, 2012. REUTERS/Stringer

An investor chats with others in front of an electronic board showing stock information at a brokerage house in Taiyuan, Shanxi province, December 5, 2012.

Credit: Reuters/Stringer

BEIJING (Reuters) - Annual growth in China's factory output, investment and retail sales may have gained pace in November thanks to recent pro-growth policies, a Reuters poll showed, reducing the chances for further policy support as inflation picks up.

The poll pointed to a modest recovery in the world's second-largest economy following seven consecutive quarters of slowing growth, which has been preluded by encouraging manufacturing sector surveys.

The median forecast by 27 economists showed China's factory output in November probably grew 9.8 percent from a year earlier, the strongest pace in eight months and accelerating from the annual pace of 9.6 percent in October.

Annual growth in fixed-asset investment may have accelerated slightly to 20.8 percent in the first 11 months from 20.7 percent in the January-October period.

The government only publishes cumulative data on investment.

Annual growth in retail sales was seen picking up to 14.6 percent in November from 14.5 percent in October, according to the poll.

Consumption and investment have been the most important drivers of China's economic growth this year as exports falter.

China's annual consumer inflation may have picked up to 2.1 percent in November, the highest in five months, from 1.7 percent in October, according to the poll.

Analysts expected China's factory-gate prices in November to fall 2.0 percent from a year earlier, compared to a fall of 2.8 percent in October, which bodes well for a corporate sector struggling to cope with falling profits.

"We expect the November data to give additional confirmation that the Chinese economy is on a modest recovery path," said Tao Wang, China economist at UBS in Hong Kong.

But rising inflation may be a concern for policymakers, she added.

"Against this background, we believe macro policy will remain accommodative but do not see any additional easing or stimulus in the coming months," Wang said in a note to clients.

Beijing has been fine-tune economic policies for a year to support economic growth and the country's new leadership has pledged to keep policy setting flexible in 2013.

The central bank cut interest rates twice in June and July and lowered bank reserve ratios three times since late 2011, but it has been pumping cash via its open market operations to support growth while retaining some policy flexibility.

China's annual economic growth slowed to 7.4 percent in the third quarter from 7.6 percent in the second , the seventh straight quarter of slower expansion, but signs of a modest rebound have emerged since September.

China's economic growth may quicken to 8.2 percent in 2013 from an expected 7.7 percent this year, but downside risk remains due to global uncertainties, the Chinese Academy of Social Sciences (CASS) said on Wednesday.

(Reporting by Kevin Yao; Editing by Simon Cameron-Moore)

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