(Yicai) Dec. 26 -- The World Bank has raised its forecasts for China's economic growth this year and next, citing the effects of recent policy easing and near-term export resilience.

The bank now projects China’s gross domestic product to expand by 4.9 percent in 2024 and 4.5 percent in 2025, up 0.1 percentage point and 0.4 point from its predictions made in June, according to a report published today.

The Chinese government has brought out incremental stimulus measures to address slowing domestic demand, the Washington-based international lender noted.

The key measures included a CNY300 billion (USD41.1 billion) program for consumer goods trade-ins and equipment upgrades to boost consumption and investment, as well as a CNY10 trillion (USD1.4 trillion) debt swap program to refinance local government off-budget debt with lower-cost on-budget alternatives over five years.

Meanwhile, China’s exports increased for the eighth consecutive month in November, rising 6.7 percent from a year earlier to USD312.3 billion, the most in 26 months, after jumping 12.7 percent in October.

The Word Bank said China’s economy maintained robust growth of 4.8 percent in the first nine months of this year, though the pace has moderated since the second quarter due to “subdued" domestic demand.

But the nation’s property sector “remains the key drag on economic activity” despite government steps, including smaller downpayment ratios, lower mortgage rates, and state-funded purchases of unsold housing, the bank said. While these policies are expected to provide a modest boost to housing demand and reduce high inventory levels, the World Bank does not foresee a full recovery in the sector until late next year.

Traditional stimulus measures will not be enough to reinvigorate growth, as China's slowdown is partly driven by structural issues such as low consumption, high levels of local government and property developer debt, and an aging population, the bank pointed out. 

“It is important to balance short-term support to growth with long-term structural reforms," said Mara Warwick, country director for China, Mongolia, and Korea of the World Bank.

She highlighted the need to address the challenges of the property sector, strengthen the social safety net, and improve local government finances so as to unlock a sustained recovery. Clear communication of policy steps will also be crucial for restoring market and household confidence, Warwick said.

Editor: Martin Kadiev