BEIJING: China’s economic growth is forecast to decline to 6.7 percent this year from an estimated 6.9 percent in 2015, amid the on-going restructuring and transformation, said a World Bank report on Wednesday
In June the bank had estimated 2016 growth of 7 percent in the world’s second-largest economy.
The faster-than-expected slowdown in China, coupled with widespread weakness in other major emerging markets, could have significant spillovers to the rest of the world, according to the bank’s January 2016 Global Economic Prospects.
The bank cut its global economic growth forecast to 2.9 percent this year from a June estimate of 3.3 percent, as showings from developed countries such as the United States will also be anemic.
Global economic growth, estimated at 2.4 percent, was less than expected in 2015, when falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity.
“Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy,” said Kaushik Basu, vice-president and chief economist of the World Bank.
“A combination of fiscal and central bank policies can be helpful in mitigating these risks and supporting growth,” he added.
Firmer growth ahead will depend on continued momentum in high income countries, the stabilization of commodity prices, and China’s gradual transition toward a more consumption and services-based growth model, said the bank.
