World Bank revises down China's 2024 growth forecast to 4.4% from 4.8%

By Ovunc Kutlu

ISTANBUL (AA) - The World Bank revised up China's economic growth forecast for next year to 4.4%, from its previous projection of 4.8%, citing a loss of confidence partly due to falling property prices.

The gross domestic product (GDP) growth expectation for the world's second-biggest economy was left unchanged at 5.1% for this year, faster than the 3% recorded last year.

"China’s economy slowed to 0.8 percent in the second quarter of 2023, after growing by 2.2 percent in the first quarter," The World Bank said Sunday in its East Asia and the Pacific Economic Update report, noting that the tariffs imposed by the US on China since 2018 shifted American imports towards other countries in the region.

"China is seeking new drivers of growth based on consumption and innovation that would avoid the problems inherent in the old model of growth, but the transition is proving difficult," said the report.

"Some policy choices and changes, have exacerbated uncertainty for consumers and investors. Loss of confidence, attributable in part to falling property prices, increased indebtedness, and the implications of aging, has led to a further increase in the already-high savings rate to 33 percent," it added.

The World Bank, in addition, revised down the GDP growth forecast for East Asia and Pacific region to 5%, from 5.1%, for this year; and to 4.5%, from 4.8%, for 2024.

"An intensification of geopolitical tensions presents a further downside risk, as do natural disasters, including extreme weather events related to climate change, especially for the small Pacific Island economies," the report noted.