BOFIT Forecast for China 2026–2028 / 1

Abstract

Official figures show that China’s economy expanded by 5 percent last year, although actual GDP growth was likely lower. With domestic consumption and fixed investment remaining subdued, economic growth continues to rely heavily on exports. Room for fiscal stimulus has narrowed, and economic policy has been geared to supporting exports. China produces significantly more than it consumes, and the trade surplus is expected to remain large throughout the forecast period. We expect China’s actual economic growth to stay around 4 percent this year, and, due to the reduced boost from exports, growth should slow to around 3½ percent in 2027 and about 3 percent in 2028. Rising internal and external economic imbalances, which add to the risks associated with the forecast, are reflected outside China as intensified competition and heightened trade tensions.