The US-based institution sees China’s economy growing by 4.3 percent next year, down from 8.1 percent.
The World Bank has lowered its growth outlook for China’s economy as nearly three years of “zero-Covid” restrictions and a real estate slump weigh on the world’s second-largest economy.
The Washington, DC-based institute cut China’s expected growth for 2022 to 2.7 percent from 4.3 percent in June in its latest forecast on Tuesday.
China’s growth forecast for the next year was cut from 8.1 percent to 4.3 percent.
“Economic activity in China continues to track the ups and downs of the pandemic – there has been an uneven recovery following the outbreak and a slowdown in growth,” the World Bank said in a statement.
“Amid the reopening of the economy, real GDP growth is projected to reach 2.7 percent this year, before recovering to 4.3 percent in 2023.”
China has begun to ease its tough “zero-covid” policy after nearly three years of disruptive restrictions, but remaining restrictions and a surge in infections continue to inflict pain on struggling businesses.
Mara Warwick, the World Bank’s country director for China, Mongolia and Korea, said China’s “continued optimization” of its pandemic policies would be critical to the country’s economic recovery and public health.
“Accelerated efforts on public health preparedness, including efforts to increase vaccinations especially among high-risk groups, may enable a safer and less disruptive reopening,” Warwick said.
The World Bank said China’s economy also faced significant non-pandemic-related risks, including an uncertain global outlook, climate change and “persistent stress” in the real estate market, fueled by Beijing’s crackdown on excessive lending. The action taken is in between.
“Continued macroeconomic policy support will be needed, as growth is expected to remain below potential and the global environment continues to weaken,” said Alitza Mileva, the World Bank’s chief economist for China.
“Directing fiscal resources towards social spending and green investment will not only support short-term demand but also contribute to more inclusive and sustainable growth in the medium term.”