Reuters: China's growth rate will slow to 4.6% in 2024
Kyiv • UNN
China's economic growth is projected to slow to 4.6% in 2024 and 4.5% in 2025 amid a real estate slump and deflationary pressures.
China's economic growth is likely to slow to 4.6% in 2024 and continue to decline to 4.5% in 2025, citing a survey reported Reuters, noting that this situation raises the heat on policymakers to roll out more stimulus measures amid deflationary pressures and a severe property slump, writes UNN.
Details
According to the average forecasts of 58 economists polled by Reuters, the country's gross domestic product (GDP) is likely to grow by 5.2% in 2023, in line with the annual growth target from the government, helped in part by the low base effect of the previous year's lockdowns due to COVID-19.
But the world's second largest economy, as indicated, is struggling to make a strong and sustainable recovery from the COVID pandemic, burdened by a lingering real estate crisis, weak consumer and business confidence, rising local government debts and weak global growth.
"The latest data suggest that the economy has started 2024 on shaky footing: persistent deflationary pressures and a modest increase in exports are unlikely to support a rapid recovery in weak domestic activity," the publication writes.
December bank lending, as indicated, was also weak.
"China's economic outlook for 2024 will be driven by the outlook for the real estate sector," Swiss Life Asset Management analysts said in a research note.
"The government's goal is to reduce the excess supply that has accumulated in the sector in recent years and bring supply in line with actual demand. Therefore, we expect the slowdown to continue in 2024 and beyond," the experts pointed out.
The survey showed that the country's GDP in the fourth quarter of 2023 is likely to grow 5.3% from a year earlier, accelerating from the third-quarter pace of 4.9%.
But on a quarterly basis, the economy is forecast to grow 1.0% in the fourth quarter, compared with a 1.3% increase in the July-September quarter, the survey showed.
Beijing has set an economic growth target of around 5% in 2023, and policy insiders expect it to maintain such a target this year.
The People's Bank of China (PBOC) has pledged to strengthen policy support for the economy this year and promote price recovery.
But the NBK faces a dilemma as more credit flows to productive forces than to consumption, which could increase deflationary pressures and reduce the effectiveness of monetary policy tools, the publication said.
The government, which unveiled 1 trillion yuan worth of government bonds in October to finance investment projects, is likely to continue to increase fiscal spending to boost economic growth, analysts said.
Consumer inflation is likely to rise to 1.0% in 2024 from 0.2% in 2023 and rise to 1.6% in 2025, the survey showed.
