The World Bank has cut its China growth outlook for this year and next, citing the impact of the abrupt loosening of strict COVID-19 containment measures and persistent property sector weakness.
The Washington-based lender, in a report released on Tuesday, said it expected China’s economy to grow 2.7% in 2022, before recovering to 4.3% in 2023 as it reopens following the worst of the pandemic.
The bank’s expected expansion for 2022 would be well below the official target of around 5.5%.
In September, the World Bank forecast China’s growth at 2.8% this year and 4.5% next year.
“China’s growth outlook is subject to significant risks, stemming from the uncertain trajectory of the pandemic, of how policies evolve in response to the COVID-19 situation, and the behavioural responses of households and businesses,” the bank said in its report.
“Persistent stress in the real estate sector could have wider macroeconomic and financial spillovers.”
China also faces highly uncertain global growth prospects and heightened geopolitical tension, the lender said.
Last week, Chinese leaders pledged to step up policy adjustment to support the slowing economy, to cushion the impact on businesses and consumers of a surge in COVID-19 infections at a time when a weakening global economy is hurting exports.
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