World Bank: China's GDP Growth to Rise to 7.9% in 2021- PingWest

China's GDP Growth to Rise to 7.9% in 2021- PingWest

World Bank: China's GDP Growth to Rise to 7.9% in 2021

December 24, 2020 3:20 am

Beijing (PingWest)—The World Bank projected that China's GDP growth will return to its pre-pandemic level by 2021, to accelerate to 7.9% next year from 2% in 2020, state-owned media China Daily reported, citing a report released by the international organization on Wednesday.

In a report titled From Recovery to Rebalancing, the World Bank however said Beijing should avoid any “significant contraction” in fiscal policy next year to keep its post-pandemic economic recovery on track.

The report predicted China’s GDP growth to slow to 2% in the current financial year, down from 6.1% but will pick up next fiscal year given that consumer spending and business investment confidence has strengthened besides improving corporate profits, labor market conditions and incomes.

Beijing had announced various stimulus measures, including the issuance of special treasury bonds, lower lending rates, and tax exemptions, to recover the world’s second-largest economy from the COVID-19 pandemic.

The Chinese government customs data showed that the country’s exports are increasing, hitting record levels last month.

“The global environment remains highly uncertain and this calls for an adaptive policy framework. A premature policy exit and excessive tightening could derail the recovery,” said Martin Raiser, World Bank country director for China. “The withdrawal of fiscal support should proceed gradually, but the focus should shift from traditional infrastructure to more social spending and green investment.”

At the annual Central Economic Work Conference held in Beijing last week, Chinese President Xi Jinping reviewed the country's economic work in 2019, analyzed the current situation, and outlined key tasks for 2020.

Chinese top policymakers pointed out that the country faces rising downward economic pressure amid intertwined structural, institutional, and cyclical problems. To achieve the expected targets for 2020, China will make ensuring stability a top priority, and uphold the policy framework of stable macro policies, flexible micro policies, and social policies that ensure basic needs are met.

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