World Bank Ups China’s Growth Forecast to 4.9% Amid Economic Challenges

The World Bank has raised its forecast for China’s GDP growth this year to 4.9%.

According to Chinese media, including the Beijing Daily, the World Bank raised its forecast for China’s economic growth projection for the year by 0.1% from 4.8% in June to 4.9% in its “China Economic Update” released on Thursday. The forecast for 2025 is 4.5%.

Despite various challenges, the World Bank attributed this upward revision to China’s robust 4.8% growth in the first three quarters of 2024. However, China’s economy has decelerated since the second quarter due to persistent weak domestic demand and a sluggish real estate sector. In response, the Chinese government has introduced measures to stimulate short-term domestic consumption and ensure long-term financial stability.

The World Bank emphasized that China needs to implement structural reforms to revive economic growth. It pointed out that increasing liquidity is significant to boost domestic consumer demand. Enhancing liquidity could also help narrow the urban-rural gap and reduce income inequality, paving the way for sustainable, domestically driven growth.

Mara Warwick, the World Bank’s Country Director for China, Mongolia, and Korea, stressed the importance of supporting short-term growth and implementing long-term structural reforms. She identified addressing real estate market challenges, bolstering social safety nets, and improving local government finances as key factors for economic recovery. Warwick also underscored the importance of clearly and specifically communicating policy to build market and public confidence.

China has implemented economic stimulus measures in the second half of 2024 to meet its growth target of “around 5%” for the year. Earlier this month, Chinese President Xi Jinping met in Beijing with the heads of ten major international economic organizations, including the IMF, World Bank, and WTO. He expressed strong confidence in China’s ability to achieve its economic growth target this year and continue to serve as the primary engine of global economic growth.