Nonetheless, the IMF anticipates an increase in the government debt in the future, reaching 84.1% in 2023 and 89.8% in 2024. Lately, the government has been targeting spending cuts in its budget and President Xi Jinping has said that curbing loans to bloated state-owned enterprises is “the priority of priorities". According to a report published by the Institute of International Finance, the total stock of corporate, household and government debt in the nation now exceeds 303% of gross domestic product and accounts for about 15% of all global debt. Although the official figure for 2022 was 76.9%, the real number is thought to be much higher and is expected to rise in coming years. Public debt is a reason for concern in China. The rebalancing from investment to consumption, from manufacturing to services, and from rural to urban migration have all been set back by the pandemic, but need to restart to make growth sustainable and inclusive (OECD, 2023).īy the end of 2022, inflation reached 2.2% and it should stabilise at 2.2% and 1.9% in 20 (IMF, 2023). The GDP trend is expected to recover at 4.4% in 2023 amid a reopening of the economy, according to Navigating Uncertainty, the latest China Economic Update released today by the World Bank (2023).Ĭhina’s economy has strongly rebounded from the deep dive following the COVID-19 outbreak and has returned to its gradually slowing path. (IMF Economic and Political Outlook, October 2022). Nevertheless, growth came back to only 3.2% in 2022. New sectors like e-commerce and online financial services are gaining momentum in an economy dominated by export-oriented sectors. In 2021, growth came back strongly at 8.1%. At the time, resilient external demand and robust domestic household consumption bolstered this growth, despite rising concerns about financial risks amid an economic restructuring led by the government. The 2019 context was already the result of a structural slowdown, as the economy moves away from an investment-led growth model and the government implements policies to reduce financial vulnerabilities. However, even though China has one of the fastest growing GDPs in the world, its economic growth was abruptly slowed to 2.3% in 2020, against 6% in 2019, due to the impact of the COVID-19 pandemic. For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.Ĭhina is the second largest global economy, the largest exporter and has the largest exchange reserves in the world.
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