China’s Economic Growth Expected to Slow in 2024



Key Takeaways

  • Major banks predict China’s GDP growth to slow to 4.6% in 2024.
  • Economic challenges include housing market correction and external demand.

Anticipated Slowdown in China’s Economy

Major international investment banks are projecting a slower economic growth rate for China in 2024 than in 2023. An average forecast from five prominent firms, including Goldman Sachs and Morgan Stanley, estimates a 4.6% increase in China’s real GDP for 2024, a decline from the 5.2% growth expected for 2023. This forecast comes as China prepares to release its official GDP figures for the previous year.

Managing Economic Risks

JPMorgan, presenting the highest forecast among the banks at 4.9%, highlights the need for China to manage downside risks, particularly from a correction in the housing market. Analysts anticipate that deflationary pressures will ease in 2024 due to global commodity prices and domestic factors. However, they also note persistent challenges like low inflation and insufficient domestic demand, which could dampen economic momentum.

Shift from High Growth Rates

China’s economy, once known for its double-digit growth rates, has been experiencing a slowdown, exacerbated by the COVID-19 pandemic and a recent slump in the real estate market. Despite growth in sectors like tourism and electric cars, the economy did not rebound as swiftly as many banks had initially predicted in 2023. Analysts from Goldman Sachs have pointed out that unexpected policy decisions, such as increasing the official fiscal deficit, have played a role in this slower recovery.

Policy Measures and Long-term Outlook

The International Monetary Fund (IMF) raised its growth forecast for China in 2023 to 5.4% due to policy announcements. However, it still expects a slowdown in 2024, citing continuing property market weaknesses and subdued external demand. China’s approach to stimulating its economy remains cautious, with Premier Li Qiang stating at the World Economic Forum in Davos that the country avoided massive stimulus measures.

Future Growth Prospects

Looking beyond 2025, analysts, including those from UBS, predict a further deceleration in China’s GDP growth to around 3.5%. This slowdown is partly attributed to the housing market slump, which limits China’s ability to deploy stimulus measures. However, analysts see potential for growth in the movement of workers from rural to urban areas and investments in sectors like manufacturing, services, and renewable energy. Despite the slowdown, China’s growth pace is still expected to outpace that of developed economies.


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