- China won’t become the world’s largest economy anytime soon, according to a new economic forecast.
- Economists at financial news firm Bloomberg predict that it will take until the mid-2040s for the Chinese economy to become larger than that of the United States.
- The revised forecast is a result of the sluggish recovery of the Chinese economy.
- Also Read: Here’s How BRICS May Impact Dollar A Little
China is unlikely to overtake the US as the world’s largest economy in the coming years. The country may never continue to claim that top spot, according to Bloomberg Economics. Before the corona pandemic, China was expected to maintain the leading position at the beginning of the next decade.
Economists at the Financial News Agency now predict that China’s gross domestic product (GDP) will overtake that of the US until the mid-2040s. Even so, they say, it will only take “a small amount” for the country to “fall behind” the U.S. again.
Growth rate of China’s economy under pressure
The revised forecast is a result of the sluggish recovery of the Chinese economy. Companies are in danger of collapsing under huge debt burdens, with declining exports and a major crisis in the real estate sector.
Confidence among consumers is also low and they are spending less. This has already led to a fall in average prices in the country. Deflation, or the reverse of inflation, is often a bad sign for economic growth because consumers are hoarding their money so they can buy more later.
“China is returning to a slower growth path faster than we expected,” the economists wrote. According to them, the crisis of confidence in the country is becoming increasingly entrenched and slowing growth potential. China also faces long-term challenges. The country saw its population decline for the first time in more than sixty years.
Economists now expect China’s economic growth to slow to 3.5 percent in 2030 and nearly 1 percent in 2050. This is lower than previous forecasts of 4.3 percent and 1.6 percent respectively.
China experienced its slowest growth in decades last year at 3 percent, due to the country’s strict lockdowns. The economy reopened this year, raising hopes for a recovery in the world’s second-largest economy. The government expects growth of 5 percent this year, but many economists expect lower growth.
Also Read: Chinese Yuan Could Hit All-Time Low This Year – Support Measures Have Little Effect
“Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator.”