World Bank Lifts China GDP Growth Forecast to 4.8%
Dou Shicong
DATE:  Jun 14 2024
/ SOURCE:  Yicai
World Bank Lifts China GDP Growth Forecast to 4.8% World Bank Lifts China GDP Growth Forecast to 4.8%

(Yicai) June 14 -- The World Bank raised its economic growth forecast for China this year to 4.8 percent from an earlier prediction of 4.5 percent, reflecting stronger-than-expected exports and new policy support.

Growth is expected to slow to 4.1 percent next year and 4 percent in 2026 because of “continued adjustment in the property sector and headwinds to manufacturing investment from soft demand and deflationary pressures,” the Washington-based international lender said in a report published today.

China’s exports rose 1.5 percent in the four months ended April 30 from a year ago, versus a 4.7 percent drop last year, boosted by stronger demand from developed markets and Asian economies, the bank noted. Service exports jumped 6.4 percent due to a recovery in inbound tourism and transport services.

“Macroeconomic policies could support near-term growth if downside risks materialize, whereas deeper structural reforms are needed to address long-term economic challenges,” it said.

China’s government has unveiled new measures to support the weak property sector, including abolishing the floor on mortgage rates and lowering the minimum downpayment on first and second homes, which could stabilize the industry earlier than anticipated and boost household confidence.

Higher-than-expected fiscal spending could also lift public investment above baseline expectations, according to the World Bank. “Additional moderate monetary easing and more fiscal support could be provided, should the economy lose growth momentum,” it said.

"Policies to accelerate the transition to carbon neutrality could boost demand for green technologies, while debt resolution and exit of unviable firms in the property and other sectors would reduce imbalances and free resources that can be used by more productive businesses," said Mara Warwick, the World Bank's country director for China, Mongolia, and Korea.

Editor: Martin Kadiev

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Keywords:   World Bank,GDP Growth