World Bank raises China's growth forecasts signaling confidence in economic resilience

陈小将

The World Bank has raised its forecast for China's 2025 economic growth to 4.9 percent on Thursday, up 0.4 percentage points from its previous projection.

Accommodative fiscal and monetary policies supported the revised forecast, bolstered by domestic consumption and investment. Meanwhile, demand from developing countries sustained exports, the World Bank said, though households remained cautious in their spending, and investment growth moderated in the third quarter.

For 2026, the World Bank projects China's economic growth at 4.4 percent, up 0.4 percentage points from its previous update. Recent fiscal measures, accommodated by stability in global trade policies, are expected to support both investment and exports, while existing headwinds are likely to persist.

The World Bank's upward revisions come as other global financial institutions have also raised their growth outlooks for China this week, reinforcing confidence in the country's economic trajectory.

The International Monetary Fund on Wednesday upgraded its forecast for China's GDP growth to 5 percent in 2025 and 4.5 percent in 2026. On the same day, the Asian Development Bank revised China's 2025 growth projection upward to 4.8 percent.

In its update, the World Bank also examined the relationship between China's high savings rate and household consumption behavior, revealing that nearly half of household savings are invested in real estate, while about a quarter are placed in bank deposits.

"China's financial system, especially non-bank institutions such as private pension funds, life insurance companies and mutual funds, could play a stronger role in supporting household consumption," said Elitza Mileva, World Bank Lead Economist for China.

"Enhancing the depth and transparency of capital markets, while allowing market forces to guide financial decisions more effectively, can improve returns, reduce precautionary savings and drive rebalancing toward greater consumption."