World Bank upgrades China’s economic growth forecast

The World Bank raised its economic growth forecast for China for 2024 and 2025 on Thursday, but cautioned that weak household and business confidence, along with persistent challenges in the property sector, would continue to weigh on the economy in the coming year.

"Addressing challenges in the property sector, strengthening social safety nets, and improving local government finances will be essential to unlocking a sustained recovery," Mara Warwick, the World Bank's country director for China, said, News.Az reports, citing Reuters.

"It is important to balance short-term support to growth with long-term structural reforms," she added in a statement.

Thanks to the effect of recent policy easing and near-term export strength, the World Bank sees China's gross domestic product growth at 4.9% this year, up from its June forecast of 4.8%.

Beijing set a growth target of "around 5%" this year, a goal it says it is confident of achieving.

Although growth for 2025 is also expected to fall to 4.5%, that is still higher than the World Bank's earlier forecast of 4.1%.

Slower household income growth and the negative wealth effect from lower home prices are expected to weigh on consumption into 2025, the Bank added.

To revive growth, Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds next year, Reuters reported this week.

The figures will not be officially unveiled until the annual meeting of China's parliament, the National People's Congress, in March 2025, and could still change before then.

While the housing regulator will continue efforts to stem further declines in China's real estate market next year, the World Bank said a turnaround in the sector was not anticipated until late 2025.

News.Az