World Bank Cuts China's Growth Forecasts

The World Bank on Tuesday cut China's growth forecast both for 2022 and 2023.

The World Bank said in a statement; "Recurrent COVID-19 outbreaks, the possibility of renewed mobility restrictions and precautionary behaviour to slow the spread of the virus could lead to longer-than-expected disruption in economic activity.

"Persistent stress in the real estate sector could also have wider macroeconomic and financial spillovers."

The Chinese economy is projected to grow 2.7% this year according to the bank's December economic update. The previous forecast was a 2.8% growth for 2022.

China relaxing its COVID-19 restrictions has also outweighed fears of a global recession that would weigh on energy demand. China, the world's top crude oil importer, is experiencing its first of three expected waves of COVID-19 cases after it relaxed restrictions but said it plans to step up support for the economy in 2023.

China’s central bank had also said last month it would keep liquidity reasonably sufficient and promote a steady fall in comprehensive financing costs while helping to stabilize the slowing economy. The latest reduction will affect all financial institutions except those implementing a 5% reserve ratio, the central bank said.