The World Bank sharply lowers its growth forecast for China

 
 
INA-sources
 
The second world economy should see its GDP progress this year by 2.7% then by 4.3% next year, against 4.3 and 8.1% initially expected.
 
The World Bank on Tuesday sharply lowered its growth forecast for China this year and in 2023, in the context of a slowdown linked to Covid-19 and a real estate crisis. The world’s second largest economy is expected to see its GDP grow this year by 2.7% and then by 4.3% next year, according to the World Bank. Its previous forecast in June was for 4.3% and 8.1% respectively.
 
In terms of health, China abruptly did an about-face in early December and lifted most of the anti-Covid restrictions in force for nearly three years, since the first cases appeared in Wuhan (center) at the end of 2019. Experts fear now that the country is ill-prepared for the wave of infections linked to this reopening, while millions of elderly and vulnerable people are not vaccinated. The Chinese capital and its 22 million inhabitants are particularly affected by a wave of contamination unprecedented since the beginning of the pandemic, and which has spread at lightning speed in recent days.
 
China’s growth outlook is subject to significant risks”underlines the World Bank, referring in particular to “the uncertain trajectory of the pandemic” et “the behavior of households and businesses”. For fear of catching the Covid, many Chinese stay at home, which heavily penalizes consumption while many shops are closed.
 
 
At the same time, the country is going through an unprecedented crisis in real estate, historically an engine of growth in China. This sector, which with construction represents more than a quarter of the country’s GDP, has been suffering since measures adopted by Beijing in 2020 to reduce corporate debt. After years of dizzying increases, property sales are now down in many cities. And many promoters are fighting for their survival, which is weakening the entire construction sector and its thousands of businesses. “Ongoing tensions in the real estate sector could have broader macroeconomic and financial repercussions”warns the World Bank.
 
Source: Time News