World Bank maintains China's 2023 GDP growth forecast but reduces 2024 Outlook
The World Bank has upheld its projection for China's economic growth in 2023, maintaining it at 5.1%, consistent with its earlier estimate from April.
However, it has revised its outlook for 2024, lowering it to 4.4% from the previous 4.8%. This adjustment is attributed to the enduring weaknesses in China's property sector.
In its semi-annual regional update, which was released on Sunday, the World Bank also made slight adjustments to its growth forecasts for East Asia and the Pacific, which includes China. The 2023 gross domestic product (GDP) growth forecast for the region was trimmed to 5.0% from the previous estimate of 5.1%.
For 2024, the regional outlook was further reduced to 4.5% growth from the previous 4.8%. This downward revision can be attributed to external factors, such as a sluggish global economy, high interest rates, and trade protectionism. The World Bank noted that a substantial number of new trade restrictions, nearly 3,000, were imposed globally in 2022, a threefold increase compared to 2019.
The report from the World Bank highlighted that China's economic rebound, following the reopening of its economy after three years of stringent zero-COVID policies, has lost some of its momentum. Elevated debt levels and weaknesses in the property sector have become significant factors hindering growth in China.
Despite several months of less favorable economic data, there are signs of stabilization in the world's second-largest economy. In September, an official survey revealed that China's factory activity expanded for the first time in six months.
Analysts suggest that further policy support may be necessary to ensure that China's economy reaches the government's growth target of approximately 5% for this year.
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