Asia Regional Integration Center

GDP growth accelerated slightly from 6.7% in 2016 to 6.9% in 2017, reversing the declining trend since 2011, when the impact of stimulus initiated by the government in late 2008 faded out. On the supply side, services remained the main driver of growth, on the back of rapid expansion in transportation, information transmission and technology, and leasing and business services. On the demand side, consumption grew by an estimated 8.0%, supported by higher household disposable income and rising government social spending.

After an uptick in 2017, GDP growth is expected to return to its moderating trajectory. Strong momentum from 6.8% growth in the last quarter of 2017 is expected to spill over into 2018, supported by a favorable global economic environment. This will push full-year 2018 growth to 6.6%, above the official target of 6.5%. The forecast assumes that the government sustains moderate tightening in both monetary and fiscal policy over the forecast period, aiming for a more sustainable growth rate. Growth is forecast to slow further to 6.4% in 2019.