In its latest East Asia and Pacific Fall 2021 Economic Update, the World Bank continues to remain optimistic on China, despite the recent challenges over the country’s property sector and electricity supply.
Key quotes
“China's economy is projected to expand by 8.5%.”
“The rest of the region is forecast to grow at 2.5% (nearly 2 percentage points less than forecast in April 2021).”
"The economic recovery of developing East Asia and Pacific faces a reversal of fortune."
"Whereas in 2020 the region contained COVID-19 while other regions of the world struggled, the rise in COVID-19 cases in 2021 has decreased growth prospects for 2021."
Market reaction
The risk sentiment is downbeat amid China Evergrande concerns, US debt ceiling deadlock and ahead of Fed Chair Jerome Powell’s testimony.
The S&P 500 futures shed 0.20% while AUD/USD is meandering near daily lows of 0.7266 after upbeat Australian Retail Sales and slowing Chinese industrial profits.
China Industrial Profits for August arrived at +10.1% YoY vs. 16.4% expected.
