By Andrea Shalal

WASHINGTON (Reuters) - Half of the world's 75 poorest countries are experiencing a widening income gap with the wealthiest economies for the first time this century in a historical reversal of development, the World Bank said in a report on Monday.

The differential between per capita income growth in the poorest countries and the richest has widened over the past five years, according to the report.

"For the first time, we see there is no convergence. They're getting poorer," Ayhan Kose, deputy chief economist for the World Bank and one of the report's authors, told Reuters.

"We see a very serious structural regression, a reversal in the world ... that's why we are ringing the alarm bells here," he said.

The report said the 75 countries eligible for grants and zero-interest loans from the World Bank's International Development Association (IDA) risk a lost decade of development without ambitious policy shifts and significant international aid.

Kose said growth in many IDA countries had already begun to taper off in these countries before the COVID-19 pandemic, but it would be just 3.4% in 2020-2024, the weakest half-decade of growth since the early 1990s. Russia's invasion of Ukraine, climate change, increases in violence and conflict also weighed heavily on their prospects.

More than half of all IDA countries are in Sub-Saharan Africa; 14 are in East Asia and eight are in Latin America and the Caribbean. Thirty-one have per capita incomes of less than $1,315 a year. They include the Democratic Republic of Congo, Afghanistan and Haiti.

One in three IDA countries is poorer now than on the eve of the pandemic. IDA countries account for 92% of the world's people who lack access to a sufficient quantity of affordable, nutritious food. Half of the countries are in debt distress, meaning they are unable to service debt or are at high risk of not being able to.

And despite their young populations - a demographic boon at a time when populations were aging nearly everywhere else, rich natural resources and abundant solar-energy potential, private and government creditors had been backing away from them.

U.S. Treasury Undersecretary Jay Shambaugh raised concerns about the worsening situation last week, warning China and other emerging official creditors against free-riding by curtailing loans to low-income countries just as the IMF or multilateral development banks were pouring funds in.

Almost 40 countries saw external public debt outflows in 2022, and the flows likely worsened in 2023, he said.

Kose said ambitious policies were needed to accelerate investment, including domestic efforts to strengthen fiscal, monetary and financial policies, and structural reforms to improve education and increase domestic revenues.

Significant financial support from the global community was also essential to make progress and lower the risk of protracted stagnation, Kose said, noting that the World Bank hoped to drum up a robust replenishment of IDA funds by December.

Stronger international coordination on climate change, debt restructurings and measures supporting cross-border trade would also be crucial, it said.

Indermit Gill, World Bank chief economist, noted that China, India and South Korea - now major economic powerhouses - had once been among the world's poorest countries, but were able to tackle extreme poverty and raise living standards.

"The world cannot afford to turn its back on IDA countries," he said.

By Kevin Yao

BEIJING (Reuters) - China's economy is expected to have slowed in the first quarter as a protracted property downturn and weak private-sector confidence weigh on demand, maintaining pressures on policymakers to unveil more stimulus measures.

Data on Tuesday is forecast to show gross domestic product (GDP) grew 4.6% in January-March from a year earlier, slowing from 5.2% in the previous three months and hitting the weakest since the first quarter of 2023, according to a Reuters poll.

The world's second-largest economy has struggled to mount a strong and sustainable a post-COVID bounce, burdened by a protracted property downturn, mounting local government debts and weak private-sector spending.

The government has set a target of around 5% for this year, which has been described by most analysts as ambitious, partly because last year's growth rate of 5.2% was likely flattered by a comparison with a COVID-hit 2022.

The economy was off to a solid start this year, fanning optimism among some analysts for an improved 2024 outcome, but March data on exports, consumer inflation and bank lending showed that momentum could falter again and policymakers may need to launch more stimulus to spur demand.

"I think Q1 GDP growth could be slightly stronger than expected - it may be close to 5%," said Zong Liang, chief of research at state-owned Bank of China.

"The growth target is achievable as we still have more policy space.”

On a quarterly basis, the economy is forecast to expand 1.4% in the first quarter, quickening from 1.0% in October-December, the poll showed.

GDP data is due on Tuesday at 0200 GMT. Separate data on March activity is expected to show both industrial output and retail sales slowing.

For 2024, the economy is expected to grow at a subdued 4.6% pace year-on-year, the poll showed, falling short of the official target of around 5.0%.

Last week, Fitch cut its outlook on China's sovereign credit rating to negative, citing risks to public finances as Beijing channels more spending towards infrastructure and high-tech manufacturing, amid a shift away from the property sector.

The government is drawing on infrastructure work - a well-used playbook- to help lift the economy as consumers are wary of spending and businesses lack confidence to expand.

China has set the 2024 quota for local government special bond issuance at 3.9 trillion yuan ($538.79 billion), up from 3.8 trillion yuan last year. Beijing also plans to issue 1 trillion yuan in special ultra-long term treasury bonds to support some key sectors.

The People's Bank of China (PBOC) has pledged to step up policy support for the economy this year and promote a rebound in prices.

Analysts polled by Reuters expected the central bank to cut the banks' reserve requirement ratios (RRR) by 25 basis points (bps) in the third quarter, following a 50-basis point cut earlier this year, which was the biggest in two years.

The PBOC might include the buying and selling of treasury bonds in its policy tool reserve in future, Financial News - a publication backed by the central bank - quoted experts as saying last week.

($1 = 7.2385 Chinese yuan renminbi)

By Howard Schneider

WASHINGTON (Reuters) - U.S. economic growth that keeps motoring above its potential is emerging as a key prop for an ongoing global expansion, but spillovers from persistently high inflation and tight monetary policy in the world's largest economy could pose new risks to a hoped-for "soft landing" around the world.

As global financial leaders gather in Washington this week for the spring meetings of the International Monetary Fund and World Bank, the outlook for the world's short-term economic fortunes may center on whether the surprising U.S. success is being driven more by constructive forces like increased labor supply and productivity or by outsized fiscal deficits that continue stoking demand and, potentially, inflation.

One answer supports what Chicago Federal Reserve President Austan Goolsbee has labeled a "golden path" where strong growth and falling inflation coexist, not only in the U.S. but in other countries tied to it through exchange rates and trade channels that have kept imports near record highs. The other may point to a bumpy ride ahead if the Fed concludes that U.S. demand remains too strong for inflation to fall, and decides it has to postpone expected interest rate cuts or - in the extreme - resort to rate hikes it had all but taken off the table.

Recent data have not been helpful, with inflation stalled well above the U.S. central bank's 2% target for the first quarter of the year, gross domestic product still expanding above potential at 2.4% for the January-March period, according to an Atlanta Fed tracker, and Fed officials hedging their words about when the rate cuts might start.

"We're not yet where we want to be on inflation," Richmond Fed President Thomas Barkin said last week, capping a seven-day run over which U.S. jobs data showed firms hired an additional 303,000 workers in March, two to three times the estimated non-inflationary pace, and new inflation data further reversed the trends Fed policymakers relied on last year to pivot towards rate cuts in 2024. Data on inflation expectations, closely monitored by the Fed, also points to progress having stalled.

The data registered quickly in markets that lowered the outlook for a Fed monetary easing, something global officials no doubt have noticed ahead of discussions this week that may center on whether the world's post-pandemic bout of inflation and tight monetary policy is ending, or simply on hold until it is clear what happens in the U.S.

WATCHING FROM ABROAD

The IMF's latest World Economic Outlook summary of the global economy will be released on Tuesday.

But recent U.S. data already have had repercussions.

Though the European Central Bank has kept its rate-cut and inflation outlooks intact for now, ECB President Christine Lagarde's press conference on Thursday was dominated by questions of just how far the euro zone's monetary policy could diverge from that of the Fed if U.S. inflation persists. Other central bankers were more explicit that an extended inflation fight in the U.S. would constrain what they might be able to do.

"It's not just about whether the Fed can decide to act in June or a bit later, it's the entire monetary policy for maybe a year that is under question," Per Jansson, deputy governor of Sweden's Riksbank, told reporters, adding there was "not a zero chance" that the Fed might have to discuss whether further hikes in borrowing costs are needed.

That is not the baseline. The Fed's last round of economic projections, issued in March, showed none of its policymakers anticipated needing to move the U.S. central bank's benchmark overnight interest rate above the current 5.25%-5.50% range, where it has been since July.

But there was also a wedge creeping in, with minutes of the Fed's March 19-20 policy meeting showing that "some participants" said overall financial conditions may not be as tight as suspected, "which could add momentum to aggregate demand and put upward pressure on inflation," the sort of dynamic that, if sustained, could argue for higher rates.

Strong growth in the face of the highest policy rate in a quarter of a century has raised a series of questions for the Fed - and by extension for the global economy - about whether the impact of monetary policy is just slow to be felt, with a U.S. nosedive coming, or whether aspects of the economy like labor participation and productivity have changed for the better.

ELEVATED RISKS

The U.S. Congressional Budget Office recently raised its outlook for potential U.S. economic growth on the basis of increased immigration and labor productivity, factors that would allow the economy to expand without generating inflation.

While Fed officials have acknowledged that both forces helped bring down the pace of price increases last year at a surprisingly fast rate - paving the way for what some have dubbed an "immaculate disinflation" - it's unclear how deep that well goes.

If it's determined the economy remains too strong or financial conditions too loose for a full return of inflation to the Fed's target, the U.S. divergence now helping pull the world upward may turn into a tight-money drag.

"I think the Fed's in watching-and-waiting mode," with perhaps only a single quarter-percentage-point rate cut this year, said Karen Dynan, a Harvard University professor and non-resident senior fellow at the Peterson Institute for International Economics.

While she does expect tighter policy to "take the edge off" demand and slow the U.S. economy, worse outcomes can't be ignored as long as the inflation problem persists.

"It's really a 'soft landing' forecast ... but I do think the risks of recession are somewhat elevated in the United States and other countries," she said.

By Rae Wee

SINGAPORE (Reuters) -Asian shares slumped and gold prices rose on Monday as risk sentiment took a hit after Iran's retaliatory attack on Israel stoked fears of a wider regional conflict and kept traders on edge.

The dollar scaled a fresh 34-year high against the yen on growing expectations that sticky inflationary pressures in the United States will keep rates there higher for longer.

Markets in Asia began the week on a cautious footing. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7% after Iran had, late on Saturday, launched explosive drones and missiles at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1.

That marked Iran's first direct attack on Israeli territory.

The threat of open warfare erupting between the arch Middle East foes and dragging in the United States has left the region on tenterhooks. U.S. President Joe Biden warned Prime Minister Benjamin Netanyahu the U.S. will not take part in a counter-offensive against Iran.

Israel said "the campaign is not over yet".

Japan's Nikkei slid more than 1%, while Australia's S&P/ASX 200 index lost 0.6%.

Hong Kong's Hang Seng Index slumped 0.8%.

The escalating tensions also sparked a flight to safety that sent gold rising 0.51% to $2,356.39 an ounce and the safe-haven dollar broadly higher, extending its 1.6% rise from last week. [GOL/]

Oil prices, however, hardly reacted to the news, as traders had largely priced in a retaliatory attack from Iran that would likely further disrupt supply chains. That saw Brent crude futures peaking at $92.18 a barrel last week, the highest level since October.

Brent was last 0.5% lower at $90.01 per barrel, while U.S. West Texas Intermediate crude futures fell roughly 0.6% to $85.13 a barrel. [O/R]

"The key risks for the global economy are whether this now escalates into a broader regional conflict, and what the response is in energy markets," said Neil Shearing, group chief economist at Capital Economics.

"A rise in oil prices would complicate efforts to bring inflation back to target in advanced economies, but will only have a material impact on central bank decisions if higher energy prices bleed into core inflation."

U.S. stock futures, meanwhile, ticked higher, after a heavy selloff on Wall Street on Friday as results from major U.S. banks failed to impress. [.N]

S&P 500 futures and Nasdaq futures each rose 0.15%.

"Geopolitical headlines are going to be very much there," said Chris Weston, head of research at Pepperstone.

"The market is really trying to understand what's going on. Their visibility to price risk in this market has become a bit more troublesome, and I think when you don't have that visibility, you do get higher volatility. That's kind of where we are."

RATE RETHINK

Elsewhere, U.S. Treasury yields held near their recent highs as traders pared back their expectations of the pace and scale of rate cuts from the Federal Reserve this year. [US/]

The benchmark 10-year yield last stood at 4.5277%, while the two-year yield held near the 5% level and was last at 4.8966%.

A continued run of resilient U.S. economic data, particularly last week's hotter-than-expected inflation report, has added to the view that U.S. rates could remain higher for longer, and that a Fed easing cycle is unlikely to commence in June.

Futures now point to about 50 basis points worth of easing expected this year, a huge pullback from the 160 bps that was priced in at the start of the year.

That sea change in the rate outlook has in turn sent the dollar on a tear, pushing it to a 34-year peak of 153.69 yen on Monday.

The euro and sterling were similarly pinned near five-month lows. [FRX/]

"We have updated our forecasts for the U.S. FOMC, pushing out the timing of the start of the interest rate cutting cycle to September 2024, from July previously," said Kristina Clifton, a senior economist at Commonwealth Bank of Australia (OTC:CMWAY).

"The U.S. CPI has been stronger than expected over the first three months of 2024. We expect that it will take a string of inflation prints of 0.2%/month or lower to give the Fed confidence that inflation can stay sustainably lower and that interest rates do not need to remain at a restrictive level."

A slew of Fed policymakers are due to speak this week, including Chair Jerome Powell, who could give further clarity on the future path of U.S. interest rates.

The shift in rate expectations has halted bitcoin's blistering rally, after the world's largest cryptocurrency repeatedly notched fresh records this year thanks to flows into new spot bitcoin exchange-traded funds and expectations of imminent Fed cuts.

Bitcoin was last more than 2% lower at $65,536, after falling below $62,000 on Sunday. [FTX]

By Libby George

LONDON (Reuters) - Emerging countries will pay a record $400 billion to service external debt this year, and nearly four dozen cannot spend the money they need for climate adaptation and sustainable development without risking default in the next five years, according to a report led by Boston University released on the eve of the IMF/World Bank spring meetings.

The report from the Debt Relief for Green and Inclusive Recovery Project (DRGR) found that 47 developing countries would hit external debt insolvency thresholds, as defined by the International Monetary Fund (IMF), in the next five years if they invested the necessary amounts to hit 2030 Agenda and Paris Agreement goals.

"They would be in such high debt distress that they would be knocking on the door of (default), given the current debt environment, if they were going to try to mobilize that kind of financing," said Kevin Gallagher, director of Boston University's Global Development Policy Center.

A further 19 developing countries lack the liquidity to meet the spending targets without help, though they would not approach default thresholds.

The report called for an overhaul of the global financial architecture, alongside debt forgiveness for the most at-risk countries and an increase in affordable finance and credit enhancements.

"We need to mobilize more capital and bend down the cost of capital for countries if we're going to have any prayer to meet this," Gallagher told Reuters.

The DRGR Project is collaboration between the Boston University Global Development Policy Center, Heinrich-Böll-Stiftung, the Centre for Sustainable Finance, SOAS and the University of London.

The report also presses the International Monetary Fund to rejig the way it calculates debt sustainability -- arcane-sounding assessments that are crucial to determining how much debt relief defaulted countries get.

If the IMF determines a country can handle an amount of debt that is too high, it can saddle the nation with unaffordable payments -- possibly pushing them back into default.

Private creditors, however, have at times criticised the Fund's analyses for being too pessimistic, making them closely watched and politically charged.

The DRGR says the IMF, which is conducting a years-long review of the analyses, must incorporate climate spending needs -- as well buffers to weather shocks, from climate to economic crises to pandemics.

"If the international community does not act in a swift and uniform manner to provide comprehensive debt relief where needed alongside new liquidity, grants and concessional development finance, the costs of inaction will be exorbitant," the report warned.

By Rae Wee

SINGAPORE (Reuters) - Gold prices rose on Monday, attracting some safe haven bids, while oil prices were choppy after Iran's retaliatory attack on Israel over the weekend stoked fears of a wider regional conflict and kept traders on edge for what comes next.

U.S. stock futures ticked higher after major indexes ended sharply lower on Friday as results from major U.S. banks failed to impress. [.N]

Iran had, late on Saturday, launched explosive drones and missiles at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1, marking its first direct attack on Israeli territory.

The threat of open warfare erupting between the arch Middle East foes and dragging in the United States has left the region on tenterhooks, as U.S. President Joe Biden warned Prime Minister Benjamin Netanyahu the U.S. will not take part in a counter-offensive against Iran.

Israel said "the campaign is not over yet".

Global markets struggled for direction early in Asia on Monday after the weekend developments in the Middle East, as oil prices edged broadly lower in volatile trade, gold jumped and the dollar held broadly steady. [FRX/]

Brent crude futures eased 0.25% to $90.21 per barrel, while U.S. West Texas Intermediate crude futures fell 0.35% to $85.36 a barrel. [O/R]

Gold rose 0.7% to $2,359.92 an ounce, after having scaled a record of $2,431.29 on Friday. The yellow metal has climbed some 14% for the year thus far. [GOL/]

"Everything seems pretty well contained," said Chris Weston, head of research at Pepperstone. "From a very simplistic perspective, the actions from Iran haven't really surprised anyone, they're very much in line with what we were pricing late last week.

"What may be causing a slight move up in the gold price... is the idea that we could see another counter response from Israel, and if that was to happen... that could cause risk (assets) to move down."

Elsewhere, U.S. 10-year Treasury futures edged slightly lower with an implied yield of 4.53%, while the dollar held near a 34-year high against the yen at 153.27.

The euro and sterling were similarly pinned near five-month lows. [FRX/]

A continued run of resilient U.S. economic data, particularly last week's hotter-than-expected inflation report, has prompted investors to reset their expectations of the pace and scale of rate cuts from the Federal Reserve this year as inflation proves stickier than previously thought.

Futures now point to about 50 basis points worth of easing expected this year, a huge pull back from the 160 bps that was priced in at the start of the year.

That sea change in the rate outlook has in turn sent the dollar on a tear and U.S. Treasury yields surging, with the two-year yield rising above 5% for the first time since November last week. [US/]

"We have updated our forecasts for the U.S. FOMC, pushing out the timing of the start of the interest rate cutting cycle to September 2024, from July previously," said Kristina Clifton, a senior economist at Commonwealth Bank of Australia (OTC:CMWAY).

"The U.S. CPI has been stronger than expected over the first three months of 2024. We expect that it will take a string of inflation prints of 0.2%/month or lower to give the Fed confidence that inflation can stay sustainably lower and that interest rates do not need to remain at a restrictive level."

A slew of Fed policymakers are due to speak this week, including Chair Jerome Powell, who could give further clarity on the future path of U.S. interest rates.

In stock markets, S&P 500 futures and Nasdaq futures each rose 0.3% in early Asia trade, reversing some of the heavy losses in U.S. equities on Friday.

All three major indexes had registered losses on the week, weighed down by lacklustre bank earnings and the evolving expectations for Fed policy.

"At the end of the day, what we're seeing at the moment is the market is really trying to understand what's going on. Their visibility to price risk in this market has become a bit more troublesome, and I think when you don't have that visibility, you do get higher volatility. That's kind of where we are," said Pepperstone's Weston.

Bitcoin was last more than 2% lower at $65,547, after falling below $62,000 on Sunday. The world's largest cryptocurrency scaled a record high last month thanks to flows into new spot bitcoin exchange-traded funds and expectations of imminent Fed rate cuts. [FTX/]

FRANKFURT (Reuters) - Economists are sticking to their view that inflation in the euro zone will fall to 2% and stay there, a European Central Bank poll showed on Friday, in comforting news as the ECB prepares to cut interest rates.

The ECB's latest Survey of Professional Forecasters (SPF) put inflation at 2.4% this year and 2.0% in 2025, 2026 and in the longer term -- unchanged from the previous round of the poll three months earlier.

Revisions to economic growth forecasts were minimal, with GDP seen expanding by 0.5% this year, 1.4% next year and in 2026, and 1.3% thereafter.

The ECB held interest rates at a record high on Thursday but signalled it could start cutting as soon as June, even though stubbornly high U.S. inflation could stop the U.S. Federal Reserve from following close behind.

The SPF's results are based on responses from 61 economists at European companies and financial institutions polled between March 18 and 21.

By Maria Martinez

BERLIN (Reuters) - German inflation eased in March, helped by a drop in energy and food prices, final data from the federal statistics office showed on Friday.

Inflation in Europe's largest economy slackened in March to 2.3%, its lowest level since June 2021. German consumer prices, harmonised to compare with other European Union countries, had risen by 2.7% year-on-year in February.

Core inflation in Germany, which excludes volatile food and energy prices, was at 3.3% in March, down from 3.4% in February.

Underlying inflation is closely watched by the European Central Bank to gauge the durability of price pressures.

By Andrea Shalal

WASHINGTON (Reuters) - IMF chief Kristalina Georgieva on Thursday said higher U.S. interest rates were not great news for the rest of the world and could become a worry if they continued for a long time, but she thought the U.S. Federal Reserve was acting prudently.

Georgieva, speaking at an event hosted by the Atlantic Council, said the U.S. government could also look at taking other measures to ensure that the U.S. economy was not overheating, but gave no details.

"Higher interest rates for the rest of the world is not great news. Higher interest rates make the U.S. more attractive so financial flows come here and that leaves the rest of the world somewhat struggling," she said.

Higher rates also drove the value of the dollar higher, which meant other countries' currencies were weaker.

"If it continues for a long time, it could become a bit of a worry in terms of financial stability," she said.

Consumer level inflation data for March released on Wednesday was unexpectedly strong, casting further doubt on the Fed’s current forecast of rate cuts at some point later this year.

The unfavorable price pressure data comes as other reports also pointed to sturdier inflation over the start of the year, challenging the Fed’s most recent projections that penciled in three rate cuts this year.

Minutes from the U.S. Federal Reserve showed officials worried that progress on inflation may have stalled, and a longer period of tight monetary policy would be needed to tame it in the world's largest economy.

Investors who had earlier expected a rate cut in June now see September as a likelier timing for the easing cycle to begin, following a third consecutive stronger-than-forecast reading on consumer inflation.

Georgieva said the U.S. economy had been successful because it was more innovative, opening space for entrepreneurship at a time of accelerating technological change.

The U.S. labor market had also held up well, with labor supply boosted by immigration, which in turn helped keep wage growth under control, she said.

The Biden administration's Inflation Reduction Act and earlier COVID aid had helped support growth, she said, adding that the International Monetary Fund saw some scope for the U.S. government to address lingering inflation and work toward a soft landing for the economy.

"So fasten your belts," she said. "At some point we will be landing."

By Kevin Yao

BEIJING (Reuters) - China's economy likely grew 4.6% in the first quarter from a year earlier - the slowest in a year despite tentative signs of steadying, a Reuters poll showed on Thursday, maintaining pressure on policymakers to unveil more stimulus measures.

Gross domestic product (GDP) in the world's second-biggest economy is also expected to grow at a subdued 4.6% pace in 2024 year-on-year, according to the median forecast of 86 economists polled by Reuters, falling short of the official target of around 5.0%.

Analysts are forecasting an even slower rate of growth for 2025 of 4.4%

The first-quarter growth forecast compares to 5.2% in the previous three months and is the lowest since the January-March quarter in 2023, underlining the strains in the economy despite stronger than expected January-February data on factory output and retail sales, as well as exports.

Analysts expected growth to pick up to 5.0% in the second quarter, but policymakers have their work cut out in trying to shore up confidence and demand.

China's economy has struggled to mount a strong and sustainable a post-COVID bounce, burdened by a protracted property downturn, mounting local government debts and weak private-sector spending.

The government has unveiled fiscal and monetary policy measures in a bid to achieve what analysts have described as an ambitious 2024 GDP growth target, noting that last year's growth rate of 5.2% was likely flattered by a comparison with a COVID-hit 2022.

"The economy has yet to recover," Ting Lu, chief China economist at Nomura, said in a note. "The property sector is still on the decline, the risk of another fiscal cliff is on the rise, geopolitical challenges are likely to sustain, and growth might face downward pressure again over the next few months."

Fitch cut its outlook on China's sovereign credit rating to negative on Wednesday, citing risks to public finances as Beijing channels more spending towards infrastructure and high-tech manufacturing, amid a shift away from the property sector.

China's consumer inflation cooled more than expected in March, while producer price deflation persisted, suggesting policymakers may need to launch more stimulus to spur demand.

On a quarterly basis, the economy is forecast to expand 1.4% in the first quarter, quickening from 1.0% in October-December, the poll showed.

The government is due to release first quarter GDP data, along with March activity data, at 0200 GMT on April 16.

MORE POLICY SUPPORT NEEDED

The Asian Development Bank (ADB) on Thursday raised its forecast on China's 2024 economic growth to 4.8% from 4.5% previously, citing stronger household consumption.

"Effective measures to resolve property sector problems and strengthen private investment and household consumption should be enhanced this year to support growth momentum," the bank said.

The People's Bank of China (PBOC) has pledged to step up policy support for the economy this year and promote a rebound in prices.

Analysts polled by Reuters expected the central bank to cut the banks' reserve requirement ratios (RRR) by 25 basis points (bps) in the third quarter, following a 50-basis point cut earlier this year, which was the biggest in two years.

Xuan Changneng, a deputy governor of the PBOC, said in late March that there was still room for cutting RRR.

Consumer inflation will likely pick up to 0.7% in 2024 from 0.2% in 2023 - well below the government's target of around 3%, and rise further to 1.6% in 2025, the poll showed.

Some analysts believe the central bank faces a challenge as more credit is flowing to production than into consumption, exposing structural flaws in the economy and reducing the effectiveness of its monetary policy tools.

(For other stories from the Reuters global long-term economic outlook polls package:)

(Polling by Devayani Sathyan, Anant Chandak and Milounee Purohit; Reporting by Kevin Yao; Editing by Shri Navaratnam)