World Bank's Optimistic Outlook on China's Economic Horizon

The World Bank raises China's growth forecast for 2024 and 2025, despite challenges in property sector and weak business confidence. It stresses the importance of structural reforms and suggests a balance between immediate growth measures and long-term reforms. A special bond issuance is expected to aid recovery.

The World Bank has revised its growth predictions for China's economy in 2024 and 2025, but challenges in the property sector and lukewarm domestic demand remain significant concerns. Analysts highlight the need for structural reforms to sustain long-term growth.

China's economic hurdles, exacerbated by a property crisis and potential U.S. tariff hikes under President-elect Donald Trump, have dampened prospects. According to Mara Warwick, World Bank's country director for China, tackling issues in the property market and enhancing fiscal policies are critical steps forward.

Despite these challenges, China's GDP is projected to grow by 4.9% this year, marking a slight increase from earlier estimates. The government remains confident in achieving its growth targets. Nevertheless, with lingering low household income and wealth effects from decreasing home prices, consumption growth could face headwinds.

(With inputs from agencies.)