Catch up – World Bank raised its 2024 China growth forecast to 4.9%, from 4.8% previously

The World Bank raised its 2024 China growth forecast to 4.9%, from 4.8% previously. In summary from the Bank’s report:

• Economic Growth Performance:

  • China’s economic growth was robust at 4.8% during the first three quarters of 2024.
  • Growth has slowed since Q2 2024 due to subdued domestic demand and a prolonged property sector downturn.

• 2024 and 2025 Projections:

  • Growth is estimated at 4.9% in 2024 and projected to moderate to 4.5% in 2025.
  • Policy easing measures are expected to provide moderate support.

• Key Challenges:

  • Subdued household and business confidence.
  • Continued headwinds from the property sector downturn.
  • Structural constraints including:
    • Low domestic consumption.
    • High debt levels among property developers and local governments.
    • An ageing population.

• Policy Efforts:

  • The government is providing policy stimulus to balance short-term demand support with long-term financial stability.
  • Emphasis on addressing the property sector crisis, strengthening social safety nets, and improving local government finances.

• World Bank Perspective:

  • Mara Warwick, World Bank Country Director for China, Mongolia, and Korea, emphasizes the need for:
    • Balancing short-term growth support with structural reforms.
    • Implementing clear and specific policy measures to boost market and household confidence.
    • Unlocking sustained recovery through structural adjustments.

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None of those “key challenges” highlighted in the report should come as any surprise. The ‘World Bank perspective’ )policy adive) is not surprising either.

This article was written by Eamonn Sheridan at www.forexlive.com.