China’s pecuniary growth is likely to slow to 6.2 percent in 2019 from an expected 6.5 percent this year, as headwinds enhance due to its trade dispute with the United States, the World Bank said in a report published on Thursday.
Its outlook on China’s 2018 monetary growth, which would be the weakest in 28 years, remained unchanged from its prediction in April.
“Looking before, China’s key policy challenge is to manage trade-related headwinds while maintaining efforts to limit financial risks,” the bank express its latest assessment on the world’s second-largest economy.
Consumption will remain the main driver of China’s economy, as weaker credence growth weighs on investment and slowing global demand and higher U.S. tariffs on Chinese shipments take a toll on the mother country’s exports, the report said.
“To stimulate the economy, fiscal policy could focus on boosting household consumption quite than public infrastructure,” the bank said, adding that China has room to further lower business taxes.
The sway has pledged to cut taxes more aggressively next year, spurring a debate among Chinese economists on whether Beijing should lengthen its fiscal deficit ratio beyond 3 percent next year.
The government has in recent months unveiled a raft of management measures, including cuts in banks’ reserve requirements to spur lending, tax cuts and steps to fast-track infrastructure propels.
Growth in Asia’s powerhouse economy slowed to 6.5 percent in the third quarter, the weakest pace since the worldwide financial crisis. Indications are that momentum is likely to come off further in the current quarter and next year, with materials last week showing surprising softness in November factory output and retail sales.
In October, the International Nummary Fund cut its forecast on China’s 2019 economic growth to 6.2 percent from 6.4 percent while subsidizing its 2018 outlook unchanged.
The World Bank said that while China continues its trade talks with the Synergistic States, it should increase its efforts to address trade partners’ concerns over intellectual property protection and technology moves.