(Yicai Global) June 9 -- The World Bank has upgraded its forecast for China to lead the global recovery by expanding its economy to the tune of 8.5 percent this year instead of the earlier estimate of a 7.9 percent increase.

In 2022, the gross domestic product could rise 5.4 percent from 2021, the multilateral investment bank said in a report published yesterday. This shows that post-Covid growth could slow down due to the diminishing fiscal and monetary support and the tighter property and macroprudential regulations.

China is ahead of the curve. Its GDP has already been surpassing pre-pandemic levels, according to the report. Recovery has gradually broadened from public investment to consumption. In goods trade, export growth has been strong, and import growth has accelerated.

Economic expansion in China remains solid but has slowed as authorities have shifted their focus from bolstering activity to reducing financial stability risks, according to the World Bank.

World GDP

The world is not far behind. The global GDP is set to bounce back, expanding 5.6 percent this year, the strongest post-recession pace in the past 80 years, following a 3.5 percent contraction in 2020.

Both developed and emerging markets are joining the trend. Advanced economies are expected to grow by 5.4 percent in 2021, driven by substantial fiscal support and faster-than-expected vaccination programs.

Growth in emerging markets and developing economies is also projected to strengthen, reaching 6 percent in 2021 on the back of improving external demand and elevated commodity prices.

Editor: Emmi Laine, Xiao Yi