World Bank Cautions Against Slowing China Growth
(31 March 2024 – Indonesia) Developing East Asia markets and Pacific economies have been warned by the World Bank to brace for slowing growth.
Higher-for-longer interest rates and escalating geopolitical tensions have soured the outlook for the region, in large part due to anticipated recessionary conditions in China, the world’s second-largest economy.
Chinese economic growth is forecast to slow to 4.5 percent in 2024 and 4.3 percent in 2025 from 5.1 percent in 2023. The forecast is in contrast to Citi who upgraded its prediction for China's GDP expansion in 2024 to five percent from 4.6 percent, citing recent improved policy delivery and upbeat consumption and investment data.
“The East Asia and Pacific region is making a strong contribution to world economic growth, even as it faces a more challenging and uncertain global environment, aging population and the impacts of climate change,” said World Bank East Asia and Pacific Vice-President Manuela V. Ferro. “Countries of the region can sustain their growth momentum by accelerating the opening of more activities to private sector investment, resolving financial sector challenges, and boosting productivity.”
“China is aiming to transition to a more balanced growth path but the quest to ignite alternative demand drivers is proving difficult. China needs more than just conventional fiscal stimulus. Stronger social protection, progressive taxation and re-allocation of public spending from infrastructure to human capital will help spur consumption” the World Bank stated in its East Asia and Pacific April 2024 Economic Update report.
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