CHINA’S GROWTH REVISED UPWARD
The World Bank in its report upgraded its economic growth forecast for China.
The world’s second-largest economy is now expected to expand by 4.8 per cent this year, up from 4 per cent projected in April.
The revised forecast brings China closer to its own official target of around 5 per cent.
Last year, China’s economy grew by 5 per cent, fueled by strong exports, stimulus measures and investment in high-tech industries.
Mattoo said the World Bank’s upgrade reflects developments that differed from earlier expectations.
In April, the bank had anticipated more protectionist measures and a pullback in fiscal stimulus due to rising debt levels.
“Those things didn’t happen in 2025, but we expect them to happen in 2026,” he noted.
Trade tensions between the United States and China had flared in April, briefly pushing tariffs above 100 per cent.
This was before a trade truce took effect, leaving US duties on Chinese goods at 57.6 per cent – more than double what it was at the start of 2025.
The World Bank expects growth to decline to 4.2 per cent next year. In its report, it cited “an expected slowdown in export growth and a likely reduction in the fiscal stimulus in light of rising public debt, as well as continued structural deceleration”.
Mattoo said with China’s growing public debt, “we expect the government, which is committed to fiscal prudence, to reign in the stimulus”.
He added that the region’s largest economy also faces broader problems.
Beyond the ongoing slump in real estate, manufacturing investment and consumer spending have weakened, which reflects a wider slowdown, said Mattoo. Underlying these trends are long-term drags from an ageing population and declining productivity.
Addressing these issues, Mattoo said, will require “deep structural reforms” to unlock China’s full economic potential.
https://www.channelnewsasia.com/east-asia/world-bank-east-asia-pacific-slower-growth-global-uncertainty-5389566
