Important Notes from the World Bank on China’s Growth

The World Bank, which was established as the Bank for Reconstruction and Development, stated that the epidemic waves caused by the Coronavirus and Omicron variant, and the intense sanctions decisions put into practice against it, upset China's economic recovery.

The World Bank gave place to its report titled "Between Shocks and Incentives", which includes explanations about the Chinese economy. In the published report, it was stated that after a strong start to 2022, multiple waves of epidemics caused by the Omicron variant and the quarantine measures taken against it slowed the growth normalization of China. In the report, which pointed out that the growth level of the Chinese economy is expected to slow down in 2022, it was stated that the country's economy is expected to grow by 4.3 percent this year and 5.2 percent next year, reflecting the economic damage caused by the Covid-19 outbreak. The country's growth momentum is expected to pick up in the second half of 2022, aided by aggressive policy incentives to ease the economic downturn, the report said. The report stated that the growth of Chinese investments is expected to accelerate this year with the help of a large fiscal stimulus, and it is said that this will partially compensate for the weakness in real consumption growth. It was also stated, "Given the projected sharp slowdown in global growth, net exports are expected to play an insignificant role in supporting economic activity." While underscoring that downside risks to China's growth outlook remain, economic disruptions from the pandemic-related lockdown measures pose a significant downside risk and could further delay the recovery of already lagged consumption and services, deter private investments, disrupt trade flows and slowdown the growth.