The World Bank has upgraded its forecast for China’s economy to 4.9% growth in 2024, driven by recent policy easing and stronger exports. However, the institution warns that deeper reforms are needed to address structural problems and a lingering property downturn. The country’s economy will face headwinds until at least late 2025, according to the World Bank.
The multilateral bank cites subdued confidence among households and businesses as a major challenge for China’s growth. Low consumption and high debt levels in the property sector are also weighing on the economy. To address these issues, the World Bank calls for deeper reforms, including addressing challenges in the property sector and strengthening social safety nets.
The report emphasizes the need to balance short-term support with long-term structural reform. Expanding access to quality education, healthcare, and social welfare could help alleviate economic anxieties among low-income households and drive entrepreneurship.
China’s middle class has expanded since the 2010s, but about 55% of the population remains economically insecure. The World Bank argues that generating opportunities for everyone to move up the economic ladder is crucial for achieving China’s goal of common prosperity.
Key forecast highlights:
* China’s GDP growth expected to reach 4.9% in 2024
* Property market downturn and weak domestic demand continue to affect the economy
* Structural reforms needed to address low consumption, high debt levels, and ageing population
* Growth forecast for 2025 revised to 4.5%, with a turnaround in the property market expected late in 2025
Source: https://www.theguardian.com/business/2024/dec/26/world-bank-lifts-china-growth-forecasts-economy-property-crisis