"Fell Behind Asia for the First Time in 30 Years"…China's Economic Growth Forecast Slashed to 2.8% This Year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The World Bank (WB) forecasted on the 26th (local time) that China's economic growth rate this year will fall below the East Asia and Pacific region average for the first time in over 30 years.

In its forecast announcement, the World Bank predicted that China's GDP growth rate this year will be 2.8%, while the East Asia and Pacific region will record 3.2%. Bloomberg News and others reported that this is the first time since 1990 that China's economic growth rate has lagged behind the East Asia and Pacific regional average.

The World Bank had predicted in April that China's economic growth rate this year would reach 5%, but it revised the forecast downward on this day. This was due to expectations that the economy would significantly worsen because of China's strict 'Zero COVID' policy and the real estate market slump. China's GDP growth rate last year was 8.1%.

China officially announced its growth target for this year as "around 5.5%" in March, but since then, there have been ongoing views that the Chinese authorities will not be able to achieve this target. Recently, the Asian Development Bank (ADB) also lowered its GDP growth forecast for China from 4% to 3.3%. In addition, Nomura, Goldman Sachs, Soci?t? G?n?rale, and others have also revised their economic growth forecasts for China downward.

Aditya Mathur, the World Bank's lead economist for the East Asia and Pacific region, analyzed to a foreign media outlet, "China, which led the recovery after the pandemic and overcame difficulties from the Delta variant, is now paying the economic costs incurred in the process of suppressing COVID-19."

The GDP growth rate of the East Asia and Pacific region was revised downward by 0.2 percentage points compared to the April forecast due to China's influence. However, excluding China, the GDP growth rate of the East Asia and Pacific region was revised upward from the April forecast of 4.8% to 5.3%. The World Bank expects that demand recovery following the easing of COVID-19 restrictions and export rebounds in the second half of this year will boost the economies of other regions excluding China.

This content was produced with the assistance of AI translation services.