How does China’s growth target for 2022 compare with the rest of the world?
Despite mounting scepticism, if China can shake off its Covid restrictions and Beijing adopts helpful monetary and fiscal policies, the world’s second largest economy may yet make its 5.5% GDP growth target for 2022.
If it pulls this off, how would it compare with other countries in the developed and developing world?
Based on recent history 5.5% growth is below the long-term trend. Between 1989 and now, China’s annual GDP growth has averaged 9.2%.
Growth had already begun to slow as the economy matured before the pandemic, with 5.9% posted in 2019. China is transitioning from an economy dominated by exports to one which is driven more by domestic demand. The year Covid struck growth slowed to 2.2% before rebounding with an 8.1% surge in 2021.
While 5.5% might feel a bit disappointing in that context it would put China near the top of a global league table based on the latest forecasts from the IMF (International Monetary Fund).
If China only achieved the 4.4% rate expected by the IMF, this would still rank reasonably high and well above the 3.3% average for advanced economies and even the 3.8% average for emerging market and developing economies. India stands out with growth of more than 8% pencilled in.
Even if growth is as low as 4%, as some observers are now predicting, it would still be an outcome which would be the envy of much of the globe.
This outlook is part of a series being sponsored by Templeton Emerging Markets Investment Trust. For more information on the trust, visit here.