The growth outlook remains balanced amid a prolonged correction in the property market and weak investor and consumer confidence, according to ADB’s Asian Development Outlook (ADO) released recently.
Economic activity in the country is expected to moderate to 4.5 per cent growth next year, consistent with ADB’s projection in April.
ADB has maintained its 2024 forecast of 4.8 per cent economic growth in China.
Economic activity there is likely to moderate to 4.5 per cent growth next year.
Inflation for 2024 is forecast at 0.5 per cent, lower than April’s 1.1-per cent forecast.
Risks to the outlook include deterioration in the property market, global fragmentation due to geopolitical issues and escalation of trade tensions.
“ADB’s research indicates that investment will support domestic demand while the property market correction continues,” ADB country director for China Safdar Parvez said in a press release. “Global demand and the domestic cost advantage in manufacturing should also bolster exports.”
Inflation for this year is now forecast at 0.5 per cent, lower than April’s 1.1-per cent projection as the overall downtrend in food price persists.
Strong global demand and increased credit availability for certain industries—including semiconductors; artificial intelligence; and low-carbon technologies such as electric vehicles, lithium-ion batteries, and renewables—will drive growth this year and next.
Infrastructure investment should regain momentum with the expected acceleration of the local government special bond issuance in the second half of this year. However, the ongoing property sector correction is expected to slow growth. The contraction in real estate investment will likely continue into next year.
Risks to the outlook include the deterioration in the property market, global fragmentation due to geopolitical issues and the escalation of trade tensions.
On the upside, acceleration and effective implementation of policy measures, including policies announced in the Third Plenum, could raise consumer and investor confidence faster than expected, resulting in higher growth and inflation than forecast.
Fibre2Fashion News Desk (DS)
