“China’s economic output will lag behind the rest of Asia for the first time since 1990, according to new World Bank forecastswhich highlight the damage caused by Xi Jinping’s zero covid policies and the collapse of the world’s largest real estate market, “says the Financial Times (FT).
“The The World Bank has revised downwards its forecast for the growth of the Gross Domestic Product in the second largest economy on the planet to 2.8%down from 8.1% last year, and down from his April forecast of 4-5%,” according to the FT story published early on Tuesday.
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At the same time, expectations for the rest of East Asia and the Pacific have improved. The region excluding China is expected to grow 5.3% in 2022compared to 2.6% last year, thanks to the high prices of raw materials and the rebound in domestic consumption after the pandemic.
The latest forecast from the Washington-based group comes after a number of financial institutions, including Goldman Sachs and Nomura, have also cut their outlook for next year. The rise in pessimism is based on the assessment that Xi is likely to continue his zero covid policy beyond 2022..
By contrast, the East Asian and Pacific economies, particularly the export-led economies of Southeast Asia, are expected to grow faster and have lower inflation in 2022.
Source: Fx Street
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