Wednesday, June 7, 2023

World Bank cuts China’s growth outlook on COVID, asset woes

BEIJING (Reuters) – The World Bank has cut its China growth outlook for this year and next, citing the impact of a sudden loosening of strict COVID-19 containment measures and persistent asset sector weakness.

China’s economy is expected to grow 2.7% in 2022, before recovering to 4.3% in 2023, the Washington-based lender said in a report released Tuesday, as it reopens after the worst of the pandemic.

The bank’s expected expansion for 2022 will be well below the official target of around 5.5%.

In September, the World Bank projected China’s growth rate to be 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, how policies evolve in response to the COVID-19 situation, and the behavioral responses of households and businesses,” the bank said in its report.

political cartoon on world leaders

“Persistent stress in the real estate sector could have wider macroeconomic and financial spillovers.”

The lender said China also faces highly uncertain global growth prospects and rising geopolitical tensions.

Last week, Chinese leaders pledged to step up policy adjustments to support the slowing economy, at a time when a weakening global economy is hurting exports, with a surge in COVID-19 infections weighing on businesses and consumers. to reduce the impact.

(Reporting by Kevin Yao; Editing by Christopher Cushing)

Copyright 2022 Thomson Reuters,

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