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REPEAT: Moody's: Strong China To Bolster G-20 GDP in 2017-18

Repeats Story Initially Transmitted at 05:10 GMT Aug 30/01:10 EST Aug 30
--Revises Up China's 2017 GDP To 6.8% From 6.6%; 2018 to 6.4% from 6.3%
--G-20 Countries Expected To Grow Above 3% in H2 2017 and 2018
     BEIJING (MNI) - Moody's Investors Service has upgraded its economic growth
forecasts for China and the world's G-20 economies this year and next, pointing
to a "synchronized global economic expansion" that the ratings service expects
to last through 2018.
     In  its Global Macroeconomic Report released Wednesday, Moody's revised
China's 2017 forecast to 6.8%, from the previous 6.6%, and said growth in 2018
would be 6.4%, up from its previous 6.3% forecast. It based the upgrade on
China's stronger-than-expected growth of 6.9% in Q1 and Q2 this year, which it
attributed largely to strong infrastructure spending.
     Despite the upgrade, China's growth is expected to decelerate gradually
over the next few years "as less policy stimulus is provided and as the
authorities seek to balance their renewed commitment to slowing the growth of
leverage while continuing to meet growth targets," Moody's said.
     "Structural factors (demographics, rebalancing and slowing productivity)
and cyclical factors (cooling in the property sector and credit cycle) will
continue to drive down the growth rate gradually over the next few years,"
Moody's said.
     Moody's also said the world's top 20 industrialized countries will
collectively grow at a rate exceeding 3% for the rest of this year and 2018,
well above the 2.6% growth the G-20 countries notched in 2016, underpinned in
particular by strong growth in China, Japan and South Korea.  
     "Several mutually reinforcing factors are aiding economic acceleration,
including accommodative monetary policy, lower fiscal drag, growth-focused
economic policies in China, stable commodity prices and moderation of global
risks," the report said.
     While the balance of risks in the world is now tilting in a more favorable
direction, Moody's said, China's deleveraging measures, the Korean Peninsula
crisis, potential conflicts in the South China Sea, and excessive monetary
policy tightening in advanced economies were all areas of concern.
     "We believe that the likelihood of geopolitical risks materializing is
small, but a significant escalation of any of these situations could be severely
detrimental," Moody's warned.
     Moody's also revised Japan's growth up to 1.5% this year from its previous
forecast of 1.1%, based on surging domestic demand. It said growth in 2018 would
be 1.1%, up from its previous forecast of 0.8%. 
     Growth in South Korea is expected to be 2.8% this year and 2.5% in 2018, up
from the previous forecasts of 2.5% and 2.0%, respectively.
     Moody's also said that although strengthening growth amid the current low
inflationary environment in most of the advanced economies "presents a puzzle,"
it expects that "many of the factors holding inflation back in advanced
economies will be resolved over time."
--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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