World Bank lifts China's growth forecast to 5.6%

The World Bank lifted its growth forecast for global growth in 2023 on Tuesday, citing better-than-expected reliance on major economies such as China and the U.S. The multilateral lender also raised its growth forecasts for these two countries. According to the latest Global Economic Prospects report, the World Bank anticipates real global GDP to expand by 2.1 percent in 2023, surpassing its previous growth forecast of 1.7 percent issued in January. However, this projected growth rate is lower than the 3.1 percent global growth rate observed in 2022.

The bank noted that growth throughout the remainder of 2023 is expected to slow significantly due to the lingering effects of monetary tightening and more restrictive credit conditions. As a result, global growth is anticipated to fall below previous projections.

The World Bank revised its growth forecasts for the U.S. and China, the world's two largest economies. The U.S. is now expected to experience a growth rate of 1.1 percent in 2023, up from the bank's previous forecast of 0.5 percent in January. Meanwhile, China's growth rate is projected to reach as high as 5.6 percent in 2023, an increase from the earlier forecast of 5.1 percent.

However, the bank reduced its growth forecasts for China, the U.S., and the world in 2024. Global growth is anticipated to slow to 2.4 percent in that year. Notably, the bank halved its previous growth forecast for the U.S. to 0.8 percent in 2024. China's growth forecast was also reduced, but a solid growth rate of 4.6 percent is still expected for the world's second-largest economy.

The World Bank's latest forecast aligns with the growing expectations of a robust recovery in the Chinese economy this year, despite facing various internal and external challenges. While some foreign media have hyped claims of a "slower-than-expected" recovery in China, many global institutions and businesses maintain confidence in China's growth.

In April, the IMF raised its growth forecast for China in 2023 by 0.8 percentage points to 5.2 percent, predicting that China will make the most significant contribution to global growth this year. The IMF estimates that China's contribution rate to global growth will reach as high as 34.9 percent.

This positive sentiment is also shared by numerous multinational companies, as they continue to expand their investments in the Chinese market. Official data shows that foreign investment in China reached 408.45 billion yuan ($59.40 billion) in the first quarter of 2023, marking a 4.9 percent year-on-year increase.