The World Bank has raised its forecast for China’s economic growth in 2017 from 6.7 percent to 6.8 percent, based on rising household income and improving external demand, according to its latest report Tuesday.
It was the bank’s second upward revision for China this year, after it revised up the projection from 6.5 percent to 6.7 percent in April.
The bank said in its China Economic Update that China’s economic growth remains resilient, which is better than expected. John Litwack, World Bank lead economist for China said that underpinned by the rising household incomes, the consumption’s contribution to the overall economy continued to grow this year.
“If you look at the 6.8 percent growth that China got in the three quarters of the year, 4.5 of that 6.8 came from consumption, 2.3 percent came from investment. We think that’s actually very healthy, because in the future, China’s ability to sustain very rapid growth is going to depend very much on rapid consumption growth,” he said.
The World Bank report also said the recovery in global trade gave a boost to China’s export. The contribution of the net export to the country’s economic growth, though staying negative for the past two years, turned positive for the first three quarters of this year.
Customs data showed that among main Chinese exports, mechanical, electronic and high-tech products showed the strongest recovery.
“We see that China seems to be doing quite well in high tech. Their growth seems to be accelerating, which is a very good sign,” said Litwack.
Meanwhile, the bank estimated China’s GDP growth will decelerate to 6.4 percent in 2018 and 6.3 percent in 2019, mainly due to domestic policy tightening.
China’s GDP expanded 6.9 percent year on year in the first three quarters, well above the government’s growth target of around 6.5 percent for this year.
Backed by better-than-expected growth, the International Monetary Fund (IMF) has revised up its forecast for China’s economic growth for the fourth time this year, to 6.8 percent in 2017 and 6.5 percent the year after.