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| 2023 could be China's weakest growth year in decades. (Source: China Daily) |
The cause is the crisis in the real estate sector, weak consumer activity and global uncertainties.
In an interview with AFP news agency, a group of 10 experts predicted that China's Gross Domestic Product (GDP) would grow by 5.2% in 2023, the lowest level since 1990, excluding the Covid-19 pandemic period.
The growth rate represents an acceleration from the 3% rate in 2022, when business activity was hampered by pandemic restrictions.
After lifting these measures, the Chinese government set a target of economic growth of around 5% in 2023. Initially, the return to normal life provided a recovery momentum at the beginning of the year, but this recovery soon lost momentum, as a lack of confidence among households and businesses cast a shadow over consumption.
In addition, the prolonged crisis in the real estate sector, record-high youth unemployment, and a slowdown in the global economy have also eroded the growth momentum of the world's second-largest economy.
In an uneven economic recovery, the services sector has benefited as consumers return to restaurants and tourist attractions. But spending remains lower than in 2019, before the Covid-19 pandemic.
Another bright spot in the economy is the state-subsidized auto sector. The electrification wave has bolstered domestic automakers like BYD, which dethroned Tesla as the world’s top-selling electric carmaker in the fourth quarter of last year.
Mr. Teeuwe Mevissen, an analyst at Rabobank, warned that the above challenges will continue in 2024.
China's economic growth is expected to slow to 4.5% this year, the World Bank (WB) said.
Meanwhile, experts in a survey by AFP news agency gave an average forecast of 4.7%. China is expected to announce a new growth target next March.
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