Despite a temporary increase due to stimulus, the World Bank predicts that China's growth will slow down next year.

• According to the World Bank, China's growth rate is projected to decrease from 4.8% to 4.3% in 2024, as stated in an economic update on Tuesday.
• Despite an increase in the 2024 figure from earlier forecasts, the 2025 rate remained unchanged due to uncertainty about the long-term effects of Beijing's recent stimulus measures.

Despite a temporary increase from recent stimulus measures, the World Bank predicts that China's economic growth rate will decrease in 2025.

On Tuesday, the international lender predicted that China's growth rate would decrease to 4.3% in 2025, from a previously projected 4.8%, in an economic update.

The 2024 figure has increased by 0.3% from the bank's forecast in April, following Beijing's recent stimulus measures that improved investor confidence and caused a stock market rally, which subsequently declined.

Despite the measures implemented, which primarily focused on monetary policy, the World Bank's 2025 growth forecast remained unchanged from previous projections.

On Tuesday, Aaditya Mattoo, the East Asia and Pacific chief economist at the World Bank, stated that the "fiscal dimension" of the stimulus measures was not clearly defined, making it difficult to make accurate projections.

Whether the stimulus can alleviate consumer concerns about declining salaries, property incomes, and health fears, as well as unemployment, remains to be seen, according to Mattoo.

Weak Chinese consumer spending was attributed to various concerns, including persistent property market weakness, an aging population, and rising global tensions, by the World Bank.

James Sullivan, head of Asia-Pacific equity research at JPMorgan, emphasized on Street Signs Asia last week that the stimulus' emphasis is on supply and investment rather than addressing China's challenges with consumer spending.

The million-dollar question in China is whether the stimulus only benefits the supply side or ultimately reaches consumer demand. However, our expectation is different.

The growth rate of China in the next year will be highly dependent on the size of any additional stimulus package and the results of the November U.S. presidential election, according to Hui Shan, chief China economist at Goldman Sachs.

Goldman predicts that China's 2025 real GDP growth will be 4.3%.

The chairman of China's National Development and Reform Commission promised to take more measures to boost the country's economy, such as accelerating the issuance of special purpose bonds to local governments. Nevertheless, the official did not reveal any new significant stimulus plans.

The World Bank has long recommended that China increase its growth by implementing daring policy measures, including promoting competition, improving infrastructure, and revamping education.

According to Mattoo, the stimulus measures will not be enough to lift China's long-term growth, but they will still be welcomed by the rest of the region, which is highly dependent on China for growth.

The East Asia and Pacific region is predicted to grow at 4.7% this year and 4.9% next year, according to the World Bank, due to anticipated export recovery and improved financial conditions.

To sustain growth, the region must look for more domestic drivers as China's pace slows, it was stated.

The World Bank stated in its Tuesday report that for three decades, China's growth has positively impacted its neighbors, however, the magnitude of this influence is decreasing.