The World Bank announced Thursday that it has raised its forecast for China’s economic growth to 4.9 percent for this year. The upgrade reflects supportive fiscal and monetary policies that have bolstered domestic consumption and investment, as well as steady demand from developing countries that has helped sustain exports.
The new projection is 0.4 percentage points higher than the Bank’s previous estimate.
For 2026, the world’s second-largest economy is expected to grow 4.4 percent. The World Bank said recent fiscal measures, combined with some stabilization in global trade policy, should help strengthen investment and exports.
“China’s economy maintained solid momentum in the third quarter of 2025, bringing year-to-date gross domestic product (GDP) growth to 5.2 percent year-on-year,” the Bank said in a statement.
However, it noted that households remain cautious in their spending amid a soft labor market and falling home prices.
The statement added that the property sector’s ongoing adjustment, slower manufacturing and infrastructure investment due to profit pressures, and tighter local government finances all contributed to weaker investment growth in the third quarter.
“China’s growth in the coming years will depend more on domestic demand,” said Mara Warwick, World Bank Country Director for China, Mongolia, and Korea. “Beyond short-term fiscal stimulus, advancing structural reforms in the social protection system and fostering a more predictable business environment can help boost confidence and lay the foundation for resilient, sustainable growth.”
According to the World Bank, risks to the outlook remain broadly balanced. The challenges facing the real estate sector, subdued earnings prospects, weaker labor markets, and trade policy uncertainty could weigh on consumption and investment for longer than expected.
“On the upside, stronger-than-anticipated fiscal spending—particularly measures to enhance social protection—and more decisive actions to stabilize the property sector could lift growth above current projections,” the Bank added.
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