The US-based institution expects China’s economy to grow 4.3 percent next year, down from 8.1 percent previously.
The World Bank has cut its growth outlook for China’s economy as nearly three years of “zero-COVID” restrictions and a housing slump weigh on the world’s second-largest economy.
In its latest forecast on Tuesday, the Washington, DC-based institution cut China’s expected growth for 2022 to 2.7 percent, down from 4.3 percent in June.
China’s projected growth for next year was cut from 8.1 percent to 4.3 percent.
“Economic activity in China continues to trace the ups and downs of the pandemic: outbreaks and slowing growth have been followed by uneven recoveries,” the World Bank said in a statement.
“Real GDP growth is projected to reach 2.7 percent this year, before recovering to 4.3 percent in 2023, amid a reopening of the economy.”
China has begun to undo its harsh “zero-COVID” policy after nearly three years of disruptive restrictions, but the remaining restrictions and a surge in infections continue to cause problems for struggling businesses.
Mara Warwick, the World Bank’s country director for China, Mongolia and Korea, said China’s “continued adaptation” of its pandemic policies would be crucial to the country’s economic recovery and public health.
“Accelerated efforts in public health preparedness, including efforts to increase vaccinations, especially among high-risk groups, could allow for a safer and less disruptive reopening,” Warwick said.
The World Bank said China’s economy also faced significant non-pandemic risks, including the uncertain global outlook, climate change and “persistent stress” on the property market amid Beijing’s crackdown on excessive lending. .
“Continued macroeconomic policy support will be needed as growth is expected to remain below potential and the global environment is weakening,” said Elitza Mileva, the World Bank’s chief economist for China.
“Directing fiscal resources towards social spending and green investment would not only support demand in the short term, but also contribute to more inclusive and sustainable growth in the medium term.”
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