China's Real GDP Growth Projected to Reach 2.3% in 2022: World Bank

Jakarta: Economic activity in China continues to track the ups and downs of the COVID-19 pandemic—outbreaks and growth slowdowns have been followed by uneven recoveries, the World Bank has said. 
 
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, according to Navigating Uncertainty, the latest China Economic Update released today by the World Bank.
 
"Continued adaptation of China’s COVID-19 policy will be crucial, both to mitigate public health risks and to minimize further economic disruption," said Mara Warwick, World Bank Country Director for China, Mongolia and Korea in a media release on Tuesday.

"Accelerated efforts on public health preparedness, including efforts to increase vaccinations especially among high-risk groups, could enable a safer and less disruptive re-opening," Warwick added.
 
China’s growth outlook is subject to significant risks, stemming from the uncertain trajectory of the pandemic, of how policies evolve in response to the COVID-19 situation, and the behavioral responses of households and businesses.
 
Persistent stress in the real estate sector could have wider macroeconomic and financial spillovers. 
 
Risks related to climate change are growing, as demonstrated by this year’s extreme weather patterns and the resulting disruption to economic activity. 
 
Externally, risks emanate from highly uncertain global growth prospects, greater-than-expected tightening in financial conditions, and heightened geopolitical tensions.
 
"Continued macroeconomic policy support will be needed, as growth is expected to remain below potential and the global environment is weakening," said Elitza Mileva, World Bank Lead Economist for China. 
 
"Directing fiscal resources towards social spending and green investment would not only support short-term demand but also contribute to more inclusive and sustainable growth in the medium term," Mileva added.
 
China has adequate fiscal policy space, especially at the central level, that could be deployed to bolster a stronger recovery, alongside easing of COVID-related public health measures.
 
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