World Bank Sees China’s Growth Slowing to 4.4 Percent in 2026 as Rebalancing Toward Consumption Stays Gradual
China’s economic growth is projected to slow to 4.4 percent in 2026 and ease further to 4.3 percent in 2027, the World Bank said in its latest China Economic Update, as the shift away from investment and exports toward household consumption proceeds only gradually. The report, titled Rebalancing Growth, described an economy that stayed resilient early in the year but faces persistent domestic headwinds.
The near-term resilience rested on specific supports. The World Bank said China’s economy held up in early 2026 on the back of strong high-tech investment and exports, with policy support and industrial buffers partly offsetting weaker domestic demand in the second quarter. Beyond that, the picture is more cautious: the projected slowdown to 4.4 percent this year, and the further easing to 4.3 percent next year, reflect a difference of just 0.1 percentage point between the two years, our calculation, underlining that the World Bank expects a slow grind rather than a sharp deceleration.
The risks are centred at home. The report flagged the continuing adjustment in the property sector to lower housing demand, cautious consumers and soft domestic demand, and warned that a deeper property downturn could compound pressure on spending and investment. It also cited volatility in global energy supply as a risk, while noting that the risks to the outlook are broadly balanced, with upside if fiscal stimulus and investment tied to artificial intelligence prove stronger than expected.
The World Bank’s prescription centred on the social safety net. Tatiana Rosito, the World Bank’s division director for China, Mongolia and Korea, said strengthening the safety net would be a key way to lift consumption, arguing that raising benefit levels, extending coverage to informal workers and providing access based on residence could give households the confidence to spend rather than save. That points to the core of the rebalancing challenge: without stronger household demand, growth stays reliant on investment and exports.
Why it matters: China is the world’s second-largest economy and the dominant buyer of Gulf crude and a major trading partner for the wider MENA region, so its growth trajectory feeds directly into oil demand, commodity prices and trade flows that shape Gulf revenues. A growth rate settling in the low-4-percent range, held back by weak consumption and property, signals steadier but slower Chinese demand, a backdrop that matters for energy exporters and for the many regional economies with deepening trade and investment ties to Beijing.
Outlook: The markers to watch are China’s June inflation data due 9 July, the pace of property-sector stabilisation, and whether policymakers step up fiscal support or measures to lift household consumption. Stronger AI-related investment is the main upside the World Bank identifies, while a deeper property downturn is the main downside.
Sources: World Bank.
