China’s economic recovery this year could be stronger than previously thought.
The World Bank on Tuesday raised its growth projection to 8.5 per cent in a new analysis of China’s economic situation – a 0.4-percentage-point rise from its previous analysis.
Next year, the World Bank expects growth of 5.4 per cent, which would mark a return to the long-term pre-pandemic trend.
Consumer and business confidence have both recently continued to improve, meaning better labour market conditions and rising domestic demand can be expected.
China’s exports are also expected to continue to perform well, according to the World Bank forecast.
However, the bank warned that a new coronavirus outbreak could disrupt economic activity.
A rigorous lockdown and strict entry restrictions since the pandemic began mean China has seen hardly any coronavirus cases since around March 2020, apart from minor outbreaks.
Since then, the country’s economy has been on the road to recovery.
The Chinese government is more cautious in its own growth forecast and set its official target for this year at “above 6 per cent.”