China’s economic growth is projected to rebound to 8.1% this year, fueled by strong exports and a gradual recovery in household consumption, according to a report from the Asian Development Bank (ADB), RT reported.
The bank’s economists attributed the economic growth to the improved job market, restored consumer confidence, and the release of pent-up household demand. Last month, Beijing set a GDP growth target of over 6% for 2021.
The head of the economics unit for the ADB resident mission in China, Dominik Peschel said, as cited by China Daily, that consumption will return as a primary driver of growth this year, followed by investment in the manufacturing sector.
ADB expects consumer inflation to moderate to 1.5% this year before it recovers to 2.3% in 2022, due to a fall in pork prices.
Experts said that, despite renewed coronavirus outbreaks in Asia, China continues to experience economic normalization as containment efforts hold and vaccinations ramp up. The ongoing pandemic-related restrictions in many regions of the world will continually fuel demand for consumer goods. As a result, China’s merchandise exports are expected to outperform imports in 2021.
According to the report, this year China’s central bank will likely guide credit growth mainly through liquidity adjustments, and targeted cuts in the reserve requirement ratio remain an option to provide qualified banks with additional funds for lending.
“Monetary policy will likely prioritize financial stability to a larger extent, especially in regard to real estate and shadow banking financing,” said the ADB.