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Three leading investment banks raised their forecasts for Chinese growth Thursday following robust figures showing economic output in the third quarter expanded 9.4 percent from a year earlier.

Goldman Sachs raised its projection for China’s gross domestic product growth to 9.0 percent from 8.5 percent for 2006 and to 9.4 percent from 9.2 percent for 2005.

JP Morgan kept its 2006 projection unchanged at 8.5 percent but raised its 2005 growth forecast to 9.3 percent from 9 percent.

China International Capital Corp. (CICC) raised its 2005 forecast to 9.3 percent from 9.2 percent while expecting 8.8 percent growth in 2006.

Goldman economists Hong Liang and Yu Song calculated that on a seasonally adjusted quarter-on-quarter basis, GDP growth accelerated to 1.9 percent in the third quarter from 1.0 percent in the April-June period.

“We expect domestic demand to play a much more important role in driving overall growth going forward, supported by favorable policy changes that benefit domestic consumption and investment,” they said in a note to clients.

Monetary policy would remain accommodative, while fiscal policy would play a bigger role in boosting demand, they said. As well as higher spending on education and health, Goldman is looking for tax cuts for households and companies.

The investment bank also lowered its forecast of consumer price inflation in China to 2.2 percent in 2006 and 1.7 percent in 2005. Previously it was projecting 3.5 percent and 2.6 percent respectively.

JP Morgan economist Grace Ng calculated that seasonally adjusted GDP growth accelerated to an annualized pace of 11.3 percent in the third quarter from 7.6 percent in the second.

Ng singled out an increase in fixed asset investment growth to 29.4 percent from a year earlier as the most notable of September’s indicators, but she said a sustained upturn in investment was unlikely.

Because of China’s concerns about the global economy, especially high oil prices, the bank said it had scaled back its expectations of further yuan appreciation to a further 3 percent by the end of 2005 instead of 5 percent.

Ha Jiming, chief economist at CICC, China’s largest investment bank, said the government’s efforts to boost consumption would help underpin economic growth this year and next year, compensating for slower export growth.