Business district in Beijing: shops closed, flu drugs sold out
Photo: Andy Wong / dpa
The World Bank has sharply lowered its growth expectations for China due to "significant risks" with regard to the corona pandemic and a real estate crisis in the country.
The Institute is now assuming economic growth of just 2.7 percent in the current year and 4.3 percent in the coming year.
In June, the World Bank had forecast 4.3 percent in 2022 and 8.1 percent in 2023.
"China's growth prospects are fraught with significant risks," the organization said on Tuesday.
The course of the pandemic in particular is causing uncertainty.
The Chinese government had recently moved away from its strict zero-Covid policy.
Frequently, testing is no longer carried out across the board and those infected are allowed to isolate themselves at home.
At the same time, the country is currently recording more corona infections than at any time since the beginning of the pandemic.
The capital region of Beijing is particularly affected.
Many Chinese are staying at home for fear of getting infected, which is having a severe impact on consumption.
Many shops are closed and there is a shortage of flu medication.
The World Bank also refers to the crisis in the real estate and construction sector, which accounts for a quarter of economic output.
After years of growth, home sales are down in many cities.
Many property developers are struggling to survive.
"The ongoing tensions in the real estate sector could have broader macroeconomic and financial implications," warned the World Bank.
At the beginning of the year, China set itself a growth target of around 5.5 percent for 2022, which is now considered unattainable.
And even if that number were reached, it would still be the smallest increase in gross domestic product in four decades, apart from 2020, the first year of the pandemic.