Recent surveys indicate that China’s economic growth will slow to just 4.5% in 2025, with a prolonged decline in the real estate sector expected to continue for several more years. According to a recent Reuters poll of experts, the anticipated growth rate for 2024 is only 4.8%, falling short of the growth targets set by the Chinese government. Policymakers in China currently seem uncertain about whether to implement more aggressive stimulus measures.

On October 18, the Chinese government plans to release third-quarter GDP data, along with key economic indicators for September, such as retail sales, industrial production, and investment figures. The poll predicts a year-on-year GDP growth of 4.5% for the third quarter, down from 4.7% in the second quarter, marking the lowest level since the first quarter of 2023.

Since late September, authorities have introduced a new round of stimulus measures that are noticeably more robust than those announced in the past two years. These efforts aim to revitalize the market, spur economic recovery, and help achieve the 5% growth target for this year.

According to Xing Zhao Peng, a senior China strategist at Australia and New Zealand Banking Group, “The main pressure on the economy comes from consumption, which is tied to deflationary concerns.” He anticipates that economic activity will improve in the fourth quarter following the announcement of these stimulus measures but maintains a growth forecast of 4.9% for 2024.

Chinese policymakers have a track record of meeting their economic growth targets, leading to skepticism about the reliability of official economic data. Many observers question whether China can achieve its growth objectives, pointing to the role of the National Bureau of Statistics.

The last time China failed to meet its growth target was in 2022 when the economic impact of the COVID-19 pandemic resulted in a mere 3% growth, far below the around 5.5% goal.

Among 75 respondents who participated in both the July and October surveys, most economists lowered their projections for China’s economic growth this year, while 32% kept their forecasts unchanged.

The latest Reuters survey reveals a more pessimistic outlook for the economy compared to the July survey, where economists predicted a growth rate of 5.0% for 2024. All surveys were conducted after China announced its latest monetary policies, yet these announcements did not significantly influence GDP forecasts, underscoring deep-seated concerns about how the real estate crisis is affecting growth prospects.

Analysts and investors expect that more detailed stimulus plans will be disclosed during the upcoming Chinese National Congress later this month. The survey forecasts that growth for the world’s second-largest economy will further slow to 4.5% by 2025, consistent with the findings from the previous July poll.

A Bloomberg report last month highlighted that the prolonged downturn in China’s real estate market has led to significant shrinkage of household wealth, with losses nearing $18 trillion, representing one of the greatest challenges facing the Chinese economy.

The real estate sector, a cornerstone of the Chinese economy, has inflicted collateral damage on approximately 200 related industries, contributing to the loss of millions of jobs, plunging consumer confidence, and reduced demand for building materials such as steel.

In a Bloomberg expert survey conducted in September, participants indicated that without stronger stimulus measures, China’s actual economic growth for this year is likely to be just 4.8%, below the government target. Considering the impact of price declines, actual growth may only reach 4.25%. The eight experts who participated in the Bloomberg survey predicted that the downturn in China’s housing market could last an additional two to five years.