The World Bank has lowered its China economic growth forecast for this year and 2023, citing the impact of the COVID outbreaks, a possible renewal of containment measures, and persistent stress in the real estate sector.
The Washington DC-based international financial institution cut China’s real GDP growth outlook to 2.7% in 2022 before recovering to 4.3 % in 2023 as the country reopens the economy.
It said, “The growth outlook is subject to significant risks. Recurrent COVID-19 outbreaks, the possibility of renewed mobility restrictions, and precautionary behavior to slow the spread of the virus could lead to longer-than-expected disruption in economic activity.”
The report noted, “Persistent stress in the real estate sector could also have wider macroeconomic and financial spillovers.”
The World Bank blames on and off COVID measures from Beijing that caused China’s economic downturn, saying ‘activity in China has followed the ups and downs of the pandemic—outbreaks and economic slowdowns have been followed by uneven recoveries.”
Mara Warwick, World Bank country director for China, said that China’s “continued adaptation” of its COVID policy would be crucial to the recovery of the country’s economy and public health.
Warwick added, “Accelerated efforts on public health preparedness, including efforts to increase vaccinations, especially among high-risk groups, could enable a safer and less disruptive reopening.”
In September, the World Bank projected China’s GDP growth at 2.8% for this year and 4.5% for next year.
Last week, the head of the International Monetary Fund (IMF) warned to lower China’s growth forecast for this year and 2023. In October, the IMF cut the country’s economic growth projection to 3.2% for 2022 with a 4.4% GDP growth forecast for 2023.