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The Chinese economy is forecast to grow 4.8 per cent in 2024, amid a recovery of household consumption, ongoing property market adjustment, and weak external demand, according to the latest report published by the Asian Development Bank (ADB).
The growth in the Asian economy is projected to moderate from a 5.2 per cent expansion last year. An uncertain external macroeconomic environment, together with trade tensions, may affect demand for Chinese exports. Growth will further moderate to 4.5 per cent next year, ADB asserted. "An increase in household consumption should help drive economic growth this year, as the labor market and household income improve," said ADB Country Director for the PRC Safdar Parvez. "Effective measures to resolve property sector problems and strengthen private investment and household consumption should be enhanced this year to support growth momentum." Investment is expected to be supported by strong public infrastructure spending, boosted by fiscal expansion, while high-tech and other manufacturing investments should continue to grow solidly on the back of policy support. However, subdued consumer and investor sentiment in the property sector is expected to persist. Inflation is forecast to rise to 1.1 per cent in 2024, as the economy continues to recover. With food prices--particularly for pork--bottoming out and energy prices increasing, overall price movements should steer away from deflation. Inflation should increase further to 1.5 per cent in 2025, assuming domestic demand continues to recover. Risks to the outlook include further deterioration in the property market, which could undermine financial stability. Recurrent financial market turbulence can also dampen consumer sentiment, ADB noted. External risks include increased trade tensions with the United States and European Union weakening Chinese exports; escalated geopolitical tensions that may disrupt supply chains; renewed energy challenges triggered by geopolitical conflict; and fragmentation of the global economy, the latest ADB report said. On the other hand, ADB has upgraded India's gross domestic product (GDP) growth forecast for the financial year 2024 from 6.7 per cent to 7 per cent and 7.2 per cent in the financial year 2025. The upward revision in the economic growth forecasts is driven by robust public and private investment and a strong services sector. (ANI)
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