China GDP forecast raised

SHANGHAI: Morgan Stanley raised its forecast for China economic growth to 7-8 percent from 5 percent for 2009 but warned the pace will slow next year as a protracted global slowdown deals a blow to the export-led economy.

The government's 4 trillion yuan ($586 billion) stimulus package announced late last year will provide temporary support to China's economy, but growth may fall back to 5.5 to 7 percent in 2010, as external demand will remain weak, Morgan Stanley Asia Chairman Stephen Roach said yesterday.

"I think there's a possibility that this year's strength may borrow from growth that might otherwise occur next year," Roach said in Shanghai. "It's premature to say China is enjoying a V-shaped recovery. I think the outcome is going to be closer to the letter W."