China’s GDP: IMF says 5.2% economic growth possible in 2023

  • The International Monetary Fund has upgraded its forecast for China’s 2023 gross domestic product (GDP) to 5.2%, owing to the nation’s full reopening.
  • Such growth is expected to have significant implications as the broader global economy is expected to slow as a result of inflation and the continued impacts of the Ukraine war.
  • The restrictions and Covid-19 outbreaks in China dampened activity in 2022, resulting in a lower-than-expected growth in economy of 3%.
  • With China’s economy now reopened, pent-up demand that accumulated during China’s strict handling of the pandemic could lead to a stronger rebound in the country as activity and mobility recover.
  • However, China’s potential growth in 2023 is precarious due to several sources of vulnerability that it possesses.
  • Such sources include surging Covid-19 patients, especially outside most urban areas, a strained real estate market, and a property crisis. These could have spillover effects onto China’s economy which could threaten financial stability and hence growth.

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