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China’s Economic 2024 Forecast: 4.6% Growth Amid Challenges

China's Economy

China’s Economic 2024 Forecast: 4.6% Growth Amid Challenges

  • China’s economy faces heightened uncertainty in 2024, influenced by ongoing challenges in the property sector.
  • The IMF projects GDP growth at 4.6% this year, with a slowdown anticipated in 2025.
  • Concerns over the accuracy of economic data and the implications of state interventions underscore the need for strategic adjustments.

In 2024, China’s economy faces uncertainty, mainly due to a prolonged downturn in the property market. The International Monetary Fund (IMF) has highlighted this issue, predicting a GDP growth rate of 4.6% for the year. However, this forecast is overshadowed by expectations of a slowdown to 4% in 2025 caused by difficulties in the property sector. These difficulties not only reduce private demand and confidence but also increase fiscal pressures on local governments. The IMF cautions that a deeper and longer contraction in the property market could result in GDP being 1.8% lower in 2025 than baseline forecasts. Despite these challenges, China achieved a growth rate of 5.2% last year, higher than anticipated, and aims to target a similar GDP growth rate of around 5% for 2024.

Data Gaps and State Policies Fuel Economic Debate

The accuracy of China’s economic data has long been a topic of debate, a discussion now amplified by the abrupt halt of youth unemployment figures last August. The National Bureau of Statistics (NBS) responded by revising and resuming the publication of jobless data for the 16 to 24 age group after a six-month break. This action occurs amid increasing doubts about the true health of China’s economy. Moreover, China’s strategy of promoting domestic technologies and self-sufficiency through state intervention and industrial policies has drawn critical attention.

Global Trade Risks from China’s Industrial Strategy

China’s industrial strategies, such as domestic subsidies and trade restrictions, mirror a wider trend across G20 economies. While these measures can sometimes be justified by market failures, they risk provoking retaliatory measures from trading partners. Such a scenario threatens to fragment global supply chains and complicate international trade relations. The IMF’s urging for Beijing to fill the gaps in its economic and financial data highlights the need for transparency and accuracy to tackle these challenges effectively.

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