World Bank adjusted its forecasts for China in 2024
The institution lowered its forecasts for China's economic performance next year
In a recent update, the World Bank (WB) revised down its projections for China’s economic growth in 2023. Growth is now estimated at 5.2 %, marking an adjustment with respect to the previous forecast of 5.6 % made last June.
The Washington-based institution also revised up its forecasts for 2024, raising China’s Gross Domestic Product (GDP) growth from 4.4 % to 4.5 %, indicating an optimistic outlook for next year.
The report highlights the prospect of a protracted recovery in the housing sector and persistently weak external demand. The government is expected to maintain a moderately expansionary fiscal and monetary stance in 2024 to support growth.
The World Bank points to “structural constraints” to growth, including “high debt levels“, “ageing populations”, and “lower productivity growth.” It also identifies “significant risks”, such as a possible prolonged slowdown in the real estate sector, increased geoeconomic tensions and the impact of climate change.
Mara Warwick, World Bank Director for China, Mongolia and Korea, stressed that the easing of macroeconomic policy has supported the short-term recovery, but stressed the importance of
Complementary structural reforms to boost confidence and revive the momentum for growth. Improving China’s debt resolution framework and strengthening the enabling environment for private business are crucial, Warwick said.
During the third quarter, the world’s second-largest economy recorded an increase of 4.9% compared to the same period of 2022, still marked by the aftermath of the already dismantled national policy of ‘zero Covid’.
Beijing had set an official growth target of “around 5 %” for this year. Amid threats such as the housing crisis, local government debt risks, slow global growth, and geopolitical tensions, Chinese authorities have sought to counteract the weak post-pandemic economic recovery in recent months.
K. Tovar
Source: Bancaynegocios
(Reference image source: Alexander Grey, Unsplash)
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