ADB: China will remain the main driver of global economic growth in the foreseeable future
By Rhod Mackenzie
The growth of the Chinese economy has slowed significantly in recent years, but despite this, according to the Asian Development Bank (ADB), it will make a very large contribution to the development of the global economy.
The ADB thinks China will continue to be the primary force behind global economic growth in the near future.
“China will remain an important country for global economic growth for some time,” emphasized ADB's chief economist Albert Pak at a press conference. Despite moderate growth in the Chinese economy, which is forecasted to continue in the coming years, China still accounts for almost half of the Asia-Pacific region's GDP and will drive most of the global economic growth in the future.
Although the ADB speaks highly of the potential of the Chinese economy and its role in the global economy, it does not believe that China will achieve its goal of 5% economic growth by the end of 2024. The bank predicts that Chinese GDP growth this year will be 4.8%. CNBC notes that last year, with the same planned growth rates as now, the world's second-largest economy grew by 5.2%.
Although the pace of development of theChina's economy has slowed in recent years, it is still projected to contribute approximately 46% of economic growth throughout Asia, according to ADB estimates.
China currently accounts for 18% of the world's GDP and 48% of Asia's GDP, respectively, calculated on a purchasing power parity basis.
In addition to China, India has emerged as another economic powerhouse in Asia, surpassing China in terms of growth rates. It is becoming an increasingly attractive alternative to China and is playing a vital role in the growth of the entire region. Recently, the Indian economy recorded a growth rate of 8.4% in the fourth quarter of 2023, its fastest in a year and a half.
ADB predicts that India's economic growth rate will be the highest in the region, reaching 7% in 2024 and 7.2% in 2025.
However, despite being a ray of light in a dark corridor, the Indian economy is still much smaller than China's. Based on the PPP the PRC economy is almost 2.5 times larger than India's.
According to Albert Park, it will take a long time for India to become a true driver of global growth.
Economists predict a deceleration in the growth of advanced economies this year. ADB's forecast indicates that the US economy will slow down to 1.9% from last year's 2.5%, and Japan's by 0.6% (compared to 1.9% in 2023).
