The World Bank has raised its forecast for growth in China this year to 7.2% from 6.5%, citing an unprecedented public spending drive as the main reason for its revision.
But the bank also warned it was too soon to declare an end to the crisis and said the world's third-largest economy may have to live with the possibility that exports will not be as spectacular as before.
'Developments in the real economy have been somewhat better than expected three months ago. More importantly, bank lending in the first part of 2009 has been much larger than expected,' the World Bank said.
'Government expenditure has also substantially outpaced expectations in the first five months. In this light, we forecast economic growth of 7.2% in 2009,' it said in its quarterly update on China.
China began to feel the impact of the global financial crisis in the second half of last year, and in response unveiled an unprecedented $580 billion stimulus package aimed at boosting domestic demand as exports dived.
The World Bank said that without the massive government injection into the economy, its growth forecast for this year would have been little more than 1%.
China, whose trade-dependent economy saw double-digit growth every year from 2002 to 2007, reported growth of 9% last year and just 6.1% in the first quarter of this year.
However, a growing body of evidence has given rise to hopes, both at home and abroad, that China could emerge from the global crisis earlier than expected.
