China economy to grow 6.6 percent, needs policy support - government think tank

A man walks on a bridge in the financial district of Pudong in Shanghai, China, April 5, 2016. REUTERSAly Song

BEIJING (Reuters) - China's economy will grow at about 6.6 percent this year, and will need to be underpinned by policy support in the second half to counter downward pressures, according to the China Academy of Social Sciences (CASS).

The forecast from one of China's top government think-tanks was reported by the official Shanghai Securities Journal newspaper on Tuesday, and marked a slightly more downbeat outlook that one given in May, when CASS had forecast growth of 6.6 percent to 6.8 percent for the year. Consumer price inflation will likely rise 2 percent for the year, while the decline in producer prices will slow, according to the CASS forecasts. Inflation was running at 2.1 percent for the first five months of the year.

Retail spending growth will be stable, but money supply growth will slow, as will growth in investment in fixed assets and property development. CASS said China should deepen economic reform and restructuring in the second half of the year, optimise leverage levels, and clean up zombie firms.

(Reporting by Elias Glenn; Editing by Simon Cameron-Moore)