World Bank not optimistic about China

In a recent report issued on Thursday, the World Bank has projected a slowdown in China’s economic growth for the coming year. Despite a recovery this year, spurred by increased investments in factories, construction, and service demand, the world’s second-largest economy is expected to see annual growth drop from 5.2% to 4.5%. The report emphasises the fragility of China’s recovery, citing weaknesses in the property sector, global demand for exports, high debt levels, and uncertain consumer confidence.

This estimate aligns with other forecasts, indicating a growth rate of around 5% for the current year before a decline in the following months. Looking ahead to 2025, the World Bank anticipates a further slowdown, with growth expected to be 4.3%, down from 4.5% in the preceding year.

China’s economy has experienced significant fluctuations in recent years, ranging from a low of 2.2% growth in 2020 to a high of 8.4% in 2021, followed by 3% last year. The impact of the COVID-19 pandemic, restrictions on travel and activities, disruptions in manufacturing and transport, job losses, and regulatory measures affecting the technology and property sectors have contributed to these economic oscillations.

The report underscores how challenges in the property sector, global demand, and high debt levels have prompted many Chinese citizens to tighten their spending habits, impacting consumer confidence and presenting additional economic hurdles. As China navigates these economic complexities, the World Bank’s projections highlight ongoing concerns about the resilience and sustainability of the country’s economic recovery.