World Bank bumps up 2009 China GDP forecast to 7.2 percent


During globalization's initial growth period many believed that the U.S.'s loss is China's gain. However, the compelling question for investors in globalization's next wave may very well be: Will China's gain be the U.S.'s gain, too?

The question is on the mind of investors and executives alike as the World Bank Thursday increased its 2009 GDP growth forecast for China to 7.2 percent from the previously-announced 6.5 percent, citing China's monetary and fiscal stimulus.

The World Bank added that it probably will not be necessary for China, the world's third largest economy in terms of purchasing power parity (PPP), to pass another fiscal stimulus package this year. Instead, the bank said China should hold off and retain the capacity for additional stimulus in 2010, if the global economy does not continue to recover and falls into a double-dip recession. In November 2008, China passed a $586 billion fiscal ($4 trillion yuan) stimulus package.

Originally published