China's economic growth slowing but stable: UBS

China's economic growth will continue to slow down but has stabilized, Swiss bank UBS said Thursday.

UBS predicted that China's economic growth will slow to around 7.2 to 7.3 percent in the fourth quarter, but it said the country's economy will grow by 7.5 percent in 2013 without any hard landing because consumption and the real estate market have stabilized.

China's target for economic growth is 7.5 percent in 2013. The country's GDP grew 7.5 percent year-on-year in the second quarter, down from 7.7 percent in the first quarter of the year, data from the National Bureau of Statistics showed on Monday.

China has no obvious unemployment pressure now, so it is likely the central government will increase its tolerance for slower growth, even to around 7 percent for 2013, Wang Tao, chief China economist with UBS, told a conference call Thursday.

However, the government would be concerned if the growth rate was lower than 7 percent, Wang said.

Chinese Premier Li Keqiang said Tuesday that China should avoid sharp economic fluctuations and keep the country's economic growth within a reasonable range.

Li said the upper limit is to avoid inflation while the lower limit is to maintain stable economic growth and employment.

The upper limit also needs to control financial risks and ensure stable reform, Wang said.

She expects policy fine-tuning to meet the ­lower limit, including relaxing credit to some extent, investing more money into infrastructure and increasing loans to agriculture.

Wang's forecast came after the IMF urged China Wednesday to accelerate reforms to shift the country's growth path away from dependence on credit and investment.

Recent data has showed that China's growth is on track, and the IMF's growth projection is 7.75 percent for this year, Markus Rodlauer, deputy director at the IMF's Asia and Pacific Department, said Wednesday.

Despite a recent moderate slowdown, the current data does not suggest that further stimulus is needed, Rodlauer said.

But he called for a strong package of reforms in financial, fiscal and structural policies to help China transition to a more consumer-based growth path.

The central government has announced a series of policies to support exports and consumption, and China still has great growth potential, Li Daxiao, research director with Shenzhen-based Yingda Securities, told the Global Times Thursday.