RAM Ratings expects gross domestic product (GDP) to expand 7.4% for the year following the Government’s announcement that GDP grew 8.95 in the second quarter ended June 30, 2010.
The rating agency said in a press release that they agree that the country’s GDP growth will possibly grow at a slower pace of 5.6% in the second-half (H2), which was broadly in line with potential output.
It said H2’s slower pace of growth was due to “moderating external demand, fading low-base effects and easing re-stocking activities”.
Meanwhile, RAM Ratings said resilient domestic demand drove consumption to a 6.5% growth while a 9.4% rebound in investment activities in H1 contributed significantly to the rapid recovery.
According to it, private consumption “is expected to maintain upbeat momentum with a 7.7% growth for the year, slightly higher than the public-sector component, where growth is anticipated to reach 6.4%”.
RAM Ratings said changing trade patterns was holding up external demand.
“Export growth is attributable to sustained (and increasing) demand from newly industrialised economies and China,” it said.
RAM Ratings noted that this trend was expected to continue as Asian economies still power much of the current global growth momentum.
“For the full-year, exports are projected to expand 12.9%, with imports clocking up 18.3% backed by a pick-up in industrial and investment activities,” it said.
RAM Ratings has also maintained the estimated inflation rate of 2.5% for this year as the rate reflected increasing consumer confidence and the rise in food and transport prices following the Government’s subsidy cuts.
Looks like quite a rosy picture,don't you agree?
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