China's GDP growth may slow to 8.6 percent in the last quarter of this year and further decelerate to 7.7 percent in the first quarter of 2012, UBS Securities projected.

The forecasts were based on China's export growth slides, weak fixed asset investment and contraction in industrial production as the Purchasing Managers' Index, a preliminary indicator of China's manufacturing activity dropped below the boom-bust line of 50 percent in November, said Wang Tao, chief economist of UBS Securities.

China's GDP growth slowed to 9.1 percent in the third quarter of this year from 9.5 percent in the second quarter and 9.7 percent in the first quarter.

Wang expected the country's export expansion to continue decelerating, saying that exports will possibly turn to drop in the first quarter of next year.

Growth of the country's exports in November has dropped to its lowest level since December 2009 as demand for made-in-China goods shrank mainly due to the escalating Eurozone debt crisis.

Trade prospects for the country's 2012 trade prospects has been described as "grim" with major trade partners in the doldrums, which Wang said will make the country's GDP growth slow to 8 percent in 2012.

Although the cold weather and upcoming Spring Festival might temporarily push up food prices, growth of the consumer price index (CPI), a main gauge of China's inflation, will continue to ease in the coming months, she said.

Wang expected the country's CPI growth to fall below 3 percent in the summer of next year, with the annual CPI rise to reach 3.5 percent in 2012.

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