(Yicai Global) Dec. 6 -- The expansion in China’s gross domestic product is expected to slow to about 5.3 percent next year amid the ongoing impact of the Covid-19 pandemic, according to the government’s leading think tank.

The economy is expected to have grown by about 8 percent this year, the Chinese Academy of Social Sciences said in its annual blue book on the economy published today.

The actual economic growth rate may be slightly lower in 2022 than the potential growth rate of 5.5 percent due to the resurgence of the pandemic and rising commodities prices, said Li Xuesong, director of the Institute of Quantitative Economics and Technical Economics at CASS.

Inflation is expected to edge up next year, with a much narrower gap between the rise in the gauges for producer and consumer prices, Li said. The CASS expects a 5 percent gain in the producer price index, and a 2.5 percent rise in the consumer price index.

International commodity prices have surged in recent quarters, while prices in other areas such as coal have fallen, so any increase in the PPI will be slower in 2022, Li said.

CPI growth may be higher, due to uncertainties from the pandemic and an incomplete recovery in household consumption, but there is unlikely to be any full-scale inflation risk, he said.

In addition, China’s export substitution effect has weakened somewhat with the gradual recovery of production capacity in major economies. The purchasing managers’ sub-index for new export orders has shown shrinkage over several months and may slide further. China’s import and export growth rates are expected to decline sharply to 10.4 percent and 6 percent next year.

Editor: Tom Litting