World Bank forecasts 6.8% GDP growth
China’s GDP growth is projected to reach 6.8 percent this year, supported by rising household incomes and improving external demand, the World Bank said in its latest economic update, released on Dec 19.
It is the latest forecast upgrade by a major international organization as the world’s second-largest economy is set to achieve its growth target of around 6.5 percent for 2017.
China’s year-on-year GDP growth averaged a higher-than-expected 6.9 percent in the first three quarters, despite its financial regulatory tightening and economic restructuring measures, the report said.
“China has maintained its growth resilience and gained reform momentum,” John Litwack, World Bank lead economist for China, said in the report. “The authorities have undertaken a host of policy and regulatory measures aimed at reducing macroeconomic imbalances and limiting financial risks without notable impact on growth,” Litwack said, adding that this year has been a “successful” year for China “on many fronts”.
The country has made headway in controlling financial risks as it has cut its overall leverage levels, the World Bank said in its China Economic Update, citing the indicator of growth in total credit to the nonfinancial sector ratio, which declined to 14.1 percent in the first 11 months of the year, compared with 15.9 percent in all of 2016.
The report came as China held its key Central Economic Work Conference, which ended on Dec 20. Participants were expected to set the tone for economic policymaking for the next year. Deleveraging as part of supply-side structural reform was expected to be one of the major topics discussed at the high-profile meeting.
The World Bank suggested that China should take advantage of its solid growth to press ahead with reforms.
“Favorable economic conditions make it a particularly opportune time to further reduce macroeconomic vulnerabilities and pursue reforms that target ‘ better quality, more efficient, fairer, and more sustainable development’, as emphasized by President Xi Jinping during the 19th National Congress of the CPC in October,” said Elitza Mileva, a World Bank senior economist and co-author of the report.
The Asian Development Bank also forecast on Dec 13 that China’s GDP growth this year could reach 6.8 percent.
International organizations have continually upgraded China’s GDP growth forecasts this year. In April, the World Bank forecast 6.5 percent, and in October it projected 6.7 percent.