What’s new: The World Bank has cut its China growth projections for this year and next, citing the possibility of longer-than-expected economic disruption amid a surge in Covid cases during reopening and a prolonged downturn in the property sector.
China’s real GDP growth is expected to slow to 2.7% in 2022, before rebounding to 4.3% in 2023, the World Bank said in a report released Tuesday. In September, the bank projected China’s economy will expand by 2.8% in 2022 and 4.5% next year. The country’s GDP grew 8.1% last year thanks to a low comparison base.
While China is in the initial stages of relaxing its Covid restrictions, infections will rise sharply and people may choose to be less social, which could weigh on consumer demand and lead to a continued disruption, according to the report. But these effects are expected to be concentrated in the first quarter next year, after which consumer confidence will improve and investment growth will pick up, the World Bank said.
The background: China’s GDP grew 3% year-on-year in the first three quarters this year, well below the government’s annual target of around 5.5%.
Since November, the country has been moving toward reopening, and getting the Chinese economy back on track is the government’s top priority.
Leading officials and policymakers held their annual Central Economic Work Conference on Thursday and Friday to set the economic policy agenda for 2023. Its main priorities include bolstering the recovery, boosting consumption and supporting private businesses, while more support will be given to the property sector.
Related: In Depth: What’s in Store for China GDP, Fiscal Policy in 2023
Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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