The World Bank has raised its 2025 economic growth forecast for China to 4.8%, up from 4% announced in April, in line with Beijing’s official target of around 5%. The increase prompted a positive revision to the overall outlook for the East Asia and Pacific region.
The improved outlook is supported by the impact of stimulus policies and strong exports, which are helping to offset weakness in the property sector and domestic consumer spending. However, the World Bank expects this momentum to slow next year as governments begin to reduce fiscal support to rein in public debt.
US-China trade tensions remain a key risk factor, with current tariffs still high at 57.6%. China’s exports to Southeast Asia and Europe continue to rise, while sales to the US have declined sharply. The World Bank expects China’s GDP growth to slow to 4.2% in 2026 due to slower exports.
Recent data has shown signs of domestic weakness with retail sales rising just 3.4% in August, property investment falling 12.9%, and current spending remaining weak. Youth unemployment remains high, with one in seven young people unemployed.
China’s economic impact on the region remains large, with a 1 percentage point decline in China’s GDP reducing growth in East Asia and the Pacific by 0.3 percentage points. With this new revision, the World Bank expects the region to grow by 4.8% in 2025, while the global economy is expected to grow by just 2.3%, the slowest pace since the 2008 financial crisis.
