Tourists visit the Huangguoshu Waterfall of “Monkey King” fame in China’s Guizhou province October 5, 2025, during a week-long public festival.
VCG | Visual China Group | Getty Images
BEIJING – The World Bank on Tuesday raised its 2025 growth forecast for China as part of an overall increase in projections for East Asia and the Pacific, following a summer that saw U.S. uncertainty in the global economy.
The World Bank now projects China’s economy to expand by 4.8%, up from 4% forecast in April. The new forecasts are closer to China’s official target of around 5% gross domestic product growth in 2025.
Economists did not provide a specific reason for the forecast change from April, but noted that China’s economy has benefited from government support that could fade next year.
Trade tensions between China and the United States escalated in April, temporarily sending U.S. tariffs on Chinese imports above 100% before the two countries reached a trade truce – now in effect until mid-November. For now, U.S. tariffs on China are at 57.6%, more than double where they were at the start of the year.
China increased stimulus in late 2024 and maintained targeted consumer trade programs this year to support retail sales. The country’s exports, a major driver of its growth, have continued to rise so far this year, as shipments to Southeast Asia and Europe offset a sharp drop in exports to U.S. companies increasing orders before higher tariffs also helped support China’s exports.
Export growth has helped offset China’s domestic growth, as has the ongoing housing crisis and lukewarm consumer spending. But this momentum is expected to slow.
The World Bank projects China’s GDP growth to expand to 4.2% in 2026, partly due to slower export growth. Economists also predict that Beijing will boost stimulus to keep public debt from rising too quickly, while China’s overall economic growth slows from its rapid expansion in past years.
Retail sales in China rose 3.4% in August from a year ago, missing analysts’ expectations. Investment in real estate fell further, down 12.9% for the first eight months of the year, compared to a decline of 12% for the first seven months.
Preliminary figures for the eight-day “golden week” holiday that ends Wednesday also highlighted modest consumer spending.
While average daily domestic passenger trips rose 5.4% year-on-year to 296 million for the Oct. 1-5 period, that growth was much slower than the 7.9% from May 1-5, Nomura’s China chief, economist Ting Lu, said in a report Monday, citing official data.
“Actual consumption growth may be even weaker than the data suggests,” Lu said, noting that due to the agrarian calendar, this year’s Golden Week combined what have typically been two public holidays.
October 1 is China’s National Day, while a traditional Mid-Autumn Festival fell on October 6 this year, compared to September 17 last year. As a result, China Golden Week took place from October 1 to 8 this year, from October 1 to 1 to 7 last year.
Economists have pointed out that one in seven young people in China are unemployed, while the country faces challenges from technological disruption and an aging population. The World Bank also noted that Startups in China only increase employment fourfold compared to seven in the United States, highlighting that a differentiating factor was the presence of state-owned enterprises in China versus North America.
A decline in China’s GDP of 1 percentage point reduces growth in the rest of East Asia and the Pacific’s development by 0.3 percentage points, according to World Bank estimates. With China’s GDP upgrading, the region is expected to expand 4.8% this year, up from 4% forecast earlier this year, according to the World Bank.
In June, the World Bank cut its global economic growth forecast for 2025 to 2.3%, largely due to trade uncertainty, noting that it would be the slowest expansion since 2008, excluding global recessions.
