China’s economy holds ‘real potential’ in 2024, think tank predicts upbeat 5.3% GDP growth

Gross domestic product (GDP) growth this year would be driven by domestic consumption and investment – by 3.7 percentage points and 1.9 percentage points, respectively – but dragged down 0.3 percentage point by exports, the CAS report said.

However, the World Bank expected weak sentiment and heightened economic uncertainty to weigh on consumption, while investment growth would remain subdued due to continued weakness in the property sector, the Washington-based international financial institution said in its Global Economic Prospects report.

Hong Yongmiao, director of the CAS Centre for Forecasting Science, said China has the potential to achieve a faster growth rate as long as it stabilises market expectations.

“There’s still a considerable gap between the actual growth rate we’re seeing now and China’s real potential. We must keep policies continuous and stable,” he said on Tuesday.

Fitch Ratings, meanwhile, predicted China’s growth rate would slow from 5.3 per cent last year to 4.6 per cent in 2024, calling 2023 a “temporary boost from the reopening”.

Global GDP between 2020 and 2024 is on track to suffer the worst half-decade of growth in 30 years, with 2024 expected to witness mounting geopolitical tensions, sluggish global trade and tighter financial conditions, according to the World Bank.

“Barring a major course correction, the world is headed for the weakest economic-growth performance of any half-decade since the 1990s,” it said.