The World Bank has told how the next year i.e. 2025 is going to be for China, the world’s second largest economy. The World Bank has revised China’s Gross Domestic Product (GDP) growth for 2024. On Thursday (December 26, 2024), the bank has increased the GDP growth rate for 2024. In June, it was said that China’s GDP is expected to grow by 4.8 percent this year, which has now been increased to around 5 percent. At the same time, it is predicted to decrease in 2025. However, the World Bank has also warned about the impact of China’s real estate sector, low income growth of citizens and low house prices on the economic situation.
The report said that China has been struggling with the crisis in the property sector for a long time and these challenges are going to remain in the next year also, due to which domestic economic stability and global markets will be at risk. The World Bank had predicted China’s GDP growth to be 4.8 percent in June, which it has now revised to 4.9 percent. Mara Warrick, director of the World Bank in China, said that President Xi Jinping will have to find a way to deal with the challenges of the property sector. Such policies have to be made which are not only beneficial for the citizens and families, but also protect them from the danger of inequality and poverty. Such policies will provide economic opportunities to the people. He also suggested that things like improving local government finances could help China in its economic recovery.
Will China’s GDP growth fall in 2025?
According to the World Bank, next year is not expected to be that good for China in terms of economic situation. According to the report, the GDP growth rate will fall from 4.9 to 4.5 percent in 2025. However, earlier it was estimated at 4.1 percent. There have been continuous positive reports from many international institutions regarding China’s economy, in which it has been estimated that China will soon overtake America. However, China’s economy is struggling a lot due to the real estate crisis. In 2024, China has suffered a lot due to this sector and now the World Bank has said that next year also the property sector will trouble the dragon in the same way. Besides, it may also have to face the brunt of high tariffs from next year because America’s newly elected President Donald Trump has warned about it several times.
Real estate crisis, low income growth and high tariffs on China
Ever since Donald Trump has talked about charging high tariffs from China, the discussion has intensified that China’s economy is going to be in a huge crisis. Donald Trump has asked to impose tariffs on goods from Canada, Mexico and China. Canada and Mexico will be taxed at 25 percent, while China will be taxed at 10 percent more. He has talked about increasing the tariff on Chinese goods by 60 percent. According to the report, the impact of low income growth and low house prices on the wealth of Chinese citizens will also be seen on China’s GDP next year. According to Reuters, to bring China’s growth back on track, the Chinese government has agreed to issue 3 trillion yuan, or $411 billion, in special treasury bonds next year.
