HONG KONG (MarketWatch) -- The World Bank has cut China's gross domestic product estimate for 2009 to 6.5% -- a forecast that falls below the mainland's own projection of an 8% expansion this year.
In its latest view of the Chinese economy released Wednesday, the World Bank said the exports from the mainland "have been hit badly" in the wake of the global financial turmoil, affecting the country's manufacturing sector.
The global monetary authority's latest view on the Chinese economy follows recent downgrades of its projections for global GDP growth and imports in 2009. In November, the World Bank had cut China's 2009 GDP estimate to 7.5% from 9.2%.
China's economic growth slowed to 6.8% in the fourth quarter of 2008 from the year-earlier period, capping full-year growth to 9%, preliminary figures showed in January. In 2007, the economy ballooned 13%.
The World Bank revision comes barely a week after Chinese Premier Wen Jiabao said the country could achieve the 8% growth target this year, helped by the strength of its domestic market and the government's economic stimulus measures.
David Dollar, World Bank's country director for China wrote in a statement that mainland was "a relative bright spot in an otherwise gloomy global economy."
"Shifting China's output from exports to domestic needs helps to provide immediate stimulus while laying the foundation for more sustainable growth in the future," Dollar wrote.
Data released earlier this month showed that Chinese exports tumbled 25.7% to $64.8 billion in February from the year-earlier period, underscoring the impact of the weakening global demand for Chinese goods and services amid an economic downturn.
Still, other official figures showed strong bank lending and an increase in February fixed-asset investments, reflecting efforts by the Chinese government to support the economy by introducing various measures to boost spending and to encourage banks to make loans to domestic companies.
Louis Kuijs, a senior economist and the main author of the World Bank report, said the somewhat lower growth wasn't likely to jeopardize China's economy or social stability, "especially not if the adverse consequences of the downturn for employment and people's livelihoods can be limited through the social safety net, preferably combined with education and training."
The Chinese stock markets were largely unmoved by the World Bank report, with the Shanghai Composite Index recently rising 0.5% to 2,228.21, while the Shenzhen All Share Index gained 1.1% to 737.74.