POLL-Modest yuan rise seen as China economy recovers

* Yuan seen gaining 1.3 pct vs dollar to 6.15 in 12 mths

* Yuan seen at 6.22 to dlr in 3 mths, 6.20 in six mths

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* For yuan poll data, click on

BEIJING, Feb 6 (Reuters) - The pace of yuan appreciation is likely to pick up slightly over the next 12 months, underpinned by steady capital inflows into the world's second-largest economy as growth recovers, according to a new Reuters poll.

The median forecast by 29 strategists and economists showed the yuan is likely to strengthen to 6.15 per dollar by the end of January 2014. That would be a rise of around 1.3 percent from Wednesday's spot rate of 6.2319.

The poll showed the Chinese currency will likely rise to 6.22 against the dollar in three months, and to 6.20 in six months.

The findings were modestly stronger than those in the last poll in October, when the yuan was seen gaining just under 1 percent to 6.23 in 12 months.

"The RMB is expected to appreciate modestly against the dollar in 2013, limited by continued weak, albeit improving, external demand," said Stephen Schwartz, chief Asia economist at BBVA in Hong Kong.

BBVA expects the yuan, which is also known as renminbi (RMB), to gain around 2 percent versus the dollar this year, quickening from a 1 percent rise in 2012 but still falling short of a 4.7 percent rise in 2011.

ECONOMIC RECOVERY

A separate Reuters poll showed that China's economic growth could rebound to 8.1 percent in 2013 from 7.8 percent last year - the weakest pace in 13 years, but the recovery momentum could fizzle in 2014 as a pick up in inflation forces the central bank to tighten policy.

The economy expanded an annual 7.9 percent in the fourth quarter of 2012, snapping seven consecutive quarters of weaker growth due to a raft of pro-growth policies that have underpinned domestic demand.

The flip side of firmer demand is that inflation is picking up, which may prompt the People's Bank of China to tolerate a stronger yuan to curb imported price rises, analysts say.

"A bigger picture is that China is still running large current account surplus while inflation seems on mild upward trend and the economic rebound appear to continue for a while," said Mark Williams, chief economist at Capital Economics in London.

"Accordingly, we expect that the PBOC will allow renminbi to appreciate somewhat in coming quarters."

LIMITED YUAN GAINS

China posted a $213.8 billion current account surplus in 2012, which was equivalent to 2.6 percent of GDP, data showed last week, down from 2.8 percent in 2011 from the peak of 10 percent in 2007.

The narrowing current account surplus reflects both weaker global demand and Beijing's efforts to spur domestic demand to gradually wean the economy off its reliance on exports.

The current account surplus in 2012 was partly offset by a $117.3 billion deficit in China's capital and financial account that signalled fund outflows amid the global malaise.

Chinese officials have recently flagged the risk of hot money inflows as China's economy recovers while Western central banks keep ultra-loose policies to spur growth.

Growing fears of competitive devaluations by major exporting countries could also stem the yuan's gains.

Chinese authorities have responded to the dramatic fall in the yen and other Asian currencies in recent weeks by tightening their grip on the yuan and beating back market pressure for the currency to appreciate.

"Barring any new major shocks, the room for further significant yuan appreciation looks limited," economists at Barclays Capital said in a research note.

"In the medium term, of course, the yuan should continue to appreciate steadily, as long as China can maintain relatively rapid economic growth."

Chinese officials have repeatedly pledged to introduce greater two-way moves in the yuan, which is close to its equilibrium after rising a further 33 percent against the dollar since July 2005, when it was revalued by 2.1 percent.

In April 2012, the central bank's doubled the size of the yuan's daily trading band against the dollar to 1 percent to let the market play a bigger role in setting the yuan's value.

The head of Development Research Centre, the cabinet's think-tank, said in December that China should widen the yuan's trading band again this year.

(Polling by China Economics Team and Sumanta Dey in Bangalore; Editing by Kim Coghill)