Beijing, 17 December 2023: The World Bank and ADB projects China’s GDP growth of 5.2% in 2023, with momentum expected to stabilize soon. A gradual recovery of consumer sentiment and policy stimulus propels it.
Despite obstacles, China’s economy has a strong outlook and a basic recovery trend. As long as policy stimulus and consumer confidence improve, China should be able to meet its growth target.
The World Bank released its most recent China Economic Update on Thursday. It predicts that global growth will remain modest at 2.4 percent in 2019. And the second-largest economy will rise by 4.5 percent in 2024.
Therefore, there remains the likelihood of a protracted recovery in the real estate sector and persistently tepid external demand. To bolster growth, the government is expected to uphold a moderately expansionary fiscal and monetary policy stance in 2024.
Central Economic Work Forum
The country has already made such policy adjustments at the Beijing annual Central Economic Work Conference. To set the country’s economic policy priorities for 2024.
Hence, the meeting called for efforts to ramp up countercyclical and cross-cyclical adjustments of macro policies. And to continue implementing proactive fiscal and prudent monetary policies.
Asian Development Outlook
In its Asian Development Outlook for December 2023. The ADB said robust services will continue to be the primary driver of China’s growth. That indicates that China remains on track to achieve its growth target of around 5 percent this year. It is surpassing the other major economies in the world. Hence, the forecasts for China’s growth by the World Bank and the ADB are slightly higher.
The World Bank Project
The World Bank also pointed out the structural constraints to growth, including high debt levels, an aging population, and slower productivity growth than in the past.
Furthermore, in an interview with CNBC’s News presenters Martin Soong and Sri Jegarajah, the chief economist of ADB, Albert Park, said: He explained how the People’s Republic of China’s stronger-than-expected third-quarter growth supports developing Asia’s higher GDP growth forecast of 4.9% for 2023. He calculated the threats to the outlook that the decline in the Chinese real estate market poses.
Moreover, the World Bank country director for China, Mongolia, and Korea, Mara Warwick, said, “Macroeconomic policy easing has been supporting the recovery in the short term.” She said, “Complementary structural reforms to boost confidence and revive growth momentum, such as improving China’s debt-resolution framework and strengthening the enabling environment for private firms, would be important.”
Elitza Mileva, the World Bank’s lead economist for China, said. “There has been a substantial reallocation of investment from real estate to manufacturing, where returns are higher.” “A fair and competitive market and a predictable regulatory environment will ensure capital flows to the most productive firms and sectors.”