Investing.com -- The World Bank has raised its forecast for China's economic growth, projecting GDP expansion of 4.9% in 2024 and 4.5% in 2025.
The revisions, announced Thursday, reflect improved export strength and recent policy easing aimed at stabilizing the economy, including measures to support the property sector and consumer spending.
This marks a slight upward adjustment of 0.1 percentage points for 2024 and 0.4 percentage points for 2025 from the bank's previous estimates.
Despite the revised outlook, challenges persist, with the World Bank noting that weak household confidence, high local government debt, and a prolonged property downturn continue to weigh on economic activity.
"Addressing challenges in the property sector, strengthening social safety nets, and improving local government finances will be essential to unlocking a sustained recovery," Mara Warwick, the World Bank's country director for China.
China's property market, a traditional driver of growth, is unlikely to recover until late 2025, according to the bank.
Measures such as liquidity support for developers, reduced housing down payments, and state purchases of excess housing inventory have been introduced to mitigate the impact.
The bank highlighted that fiscal policy could provide an additional boost, especially if Beijing signals increased central government spending.
However, subdued domestic demand is expected to keep inflation low, with projections of 0.4% in 2024 rising to 1.1% in 2025.
"It is important to balance short-term support to growth with long-term structural reforms," Warwick emphasized, adding that clear policy communication is key to restoring confidence among consumers and markets.