By John Meyer, consultant in financial affairs – Eurasia Business News, December 26, 2024. Article No 1349.

The World Bank has raised its forecasts for China’s GDP growth, now projecting an increase of 4.9% for 2024 and 4.5% for 2025. This marks a slight upward adjustment from previous estimates, which were 4.8% for 2024 and 4.1% for 2025.

The Chinese government have set a growth target of approximately 5% for 2025, maintaining the same benchmark as the previous year.

Revised Projections: The adjustments reflect improvements in export strength and recent policy easing aimed at stabilizing the economy, particularly measures to support the property sector and boost consumer spending.

Policy Measures: The World Bank highlighted several initiatives, including liquidity support for property developers, reduced housing down payments, and state purchases of excess housing inventory, as crucial to mitigating the impacts of the ongoing property downturn.

Challenges Ahead: Despite the positive revisions, the World Bank cautions that China’s economy faces significant structural challenges, including weak consumer confidence, high local government debt, and a prolonged downturn in the property market. The recovery in this sector is not expected until late 2025.

In its report, the World Bank also assesses economic mobility in China as a tool to close the urban-provincial divide, reduce income inequality, and increase domestic consumption. The bank notes that although the share of the middle class in China has grown since the 2010s and by 2021 it was 32% of the total population, about 55% of the population still remains economically vulnerable.

In summary, while the World Bank’s updated forecasts indicate a more optimistic outlook for China’s economic growth in the coming years, addressing underlying structural issues will be essential for sustaining this growth trajectory.

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© Copyright 2024 – Eurasia Business News. Article no. 1349.