Tourists flock to Huangguoshu Waterfall in Guizhou, China during a week-long holiday. World Bank raises China’s 2025 growth forecast to 4.8%, attributing the boost to government support. Trade tensions with the U.S. have eased, but China’s economy faces challenges from slowing exports and domestic growth.

China’s exports continue to rise, offsetting declines in consumer spending and real estate investment. GDP expected to slow to 4.2% in 2026 as export growth eases. Retail sales in August grew by only 3.4%, missing expectations, while investment in real estate fell by 12.9%.

Preliminary data from China’s “Golden Week” holiday shows sluggish consumer spending despite a 5.4% increase in domestic passenger trips. The economy faces challenges from high unemployment among young people, technological disruption, and an aging population.

A decline in China’s GDP could impact growth in the rest of East Asia and Pacific by 0.3 percentage points. The region is expected to expand by 4.8% this year, up from earlier forecasts. Global economic growth for 2025 was cut to 2.3%, the slowest since 2008, due to trade uncertainty.

Read more at CNBC: World Bank raises China growth forecast to 4.8% despite U.S. trade tensions