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World Bank: China's economic growth may still be higher than predicted

Beijing Daily (Reporter Bai Bo) On June 14, the World Bank released the latest issue of China's Economic Briefing: Beyond Real Estate Growth - Cyclical Rise and Structural Challenges, according to which, driven by improved exports, China's economic activity will recover in early 2024, but the growth of domestic demand will slow down. China's manufacturing and infrastructure investment and service consumption expenditure remained strong, but the adjustment of the real estate market continued.

The World Bank's Global Economic Outlook released on June 11 predicted that China's gross domestic product (GDP) would grow by 4.8% in 2024, 0.3 percentage points higher than the forecast in December 2023. The briefing pointed out that on the one hand, the increase was because China's exports were stronger than expected, but also reflected the impact of the government's real estate support policies and increased fiscal expenditure.

According to the briefing, the upside and downside risks facing China's economic growth prospects are roughly balanced. From the perspective of upward risks, the real estate industry stabilized earlier and the fiscal expenditure was higher than expected, which may make the economic growth higher than the current forecast. If substantial progress is made in structural reform, including the creation of an enabling environment for the private sector, it may boost short-term confidence and long-term productivity growth. Downside risks include that the recovery of the real estate market is delayed to 2024, deflation pressure continues to exist, global growth is lower than expected, and trade tensions increase.

Hua Maya, Director of the China, Mongolia and South Korea Bureau of the World Bank, said, "China's implementation of structural reform will not only help maintain the momentum of growth in the short term, but also help to achieve long-term goals. The policy of accelerating the transition to carbon neutrality can promote the demand for green technology, while the disposal of debt problems in real estate and other industries and the withdrawal of unsustainable enterprises from the market can reduce imbalances and release resources for more productive enterprises. "