Economists Project China’s Economic Landscape in 2024 to Fall to 4.6%

• 30 December 2023
• International News
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As China’s economic trajectory undergoes shifts, economists anticipate a moderated growth of 4.6% in 2024, following an anticipated 5.2% expansion this year. This projection comes against the backdrop of a sluggish real estate market and tepid consumption.

With 23 experts expecting this year’s growth to align closely with Beijing’s target of approximately 5%. According to a survey conducted by Nikkei Asia, the consensus among 25 China specialists reflects cautious optimism, published on 26 December 2023.

Several factors contribute to this economic narrative, notably the downturn in the property sector and subdued consumer confidence. The real estate market, facing correction, has become a focal point for economists, with concerns extending to its impact on investment, household confidence, and local government finances. Eunice Tan, Head of Credit Research for Asia-Pacific at S&P Global Ratings, notes, “Property pain is dragging on China’s economic rebound, which further hits property sales in a negative feedback loop.”

While the 2023 growth rate benefits from a low base in the previous year due to the COVID-19 pandemic, experts remain wary of potential headwinds in 2024. The downward risk, particularly associated with the property sector, is evident in S&P Global Ratings’ projection of a 4.6% growth rate for 2024, with a possible downside scenario of 2.9%.

The real estate sector’s challenges, coupled with geopolitical tensions and demographic shifts, contribute to the uncertainties in China’s economic landscape. Analysts highlight the “3Ds” – demographics, deleveraging, and de-risking – as influential factors likely to impact economic growth in the coming decade. Hui Shan, Chief China Economist at Goldman Sachs, emphasises these factors, projecting a notable slowing of China’s real GDP growth to 3% by 2034.

As China navigates these challenges, the resilience of its economic policies, particularly in addressing the property market and stimulating consumer confidence​ even in microeconomic settings, will play a crucial role. Investors and analysts alike keenly observe how Beijing responds to these economic dynamics, shaping the narrative of China’s economic evolution in the years to come.

• Analysis
• Economy and Finance