The economy of the People’s Republic of China (PRC) is projected to grow by 4.7% in 2025, unchanged from the April forecast and close to the government’s target of around 5.0%, according to the Asian Development Outlook (ADO) September 2025 report by the Asian Development Bank (ADB). Growth is expected to moderate to 4.3% in 2026.
Higher-than-expected gross domestic product growth in the first half of 2025 was driven by expansionary fiscal policies, robust industrial activity, and strong exports. However, challenges including a weak property market, subdued household income growth, and constrained consumption are expected to weigh on economic performance in the second half of the year and into 2026.
ADB Country Director for the PRC, Asif S. Cheema, highlighted that fiscal expansion and targeted subsidies have helped sustain growth momentum despite headwinds from the property sector and external trade tensions. He emphasized that continued efforts to boost domestic consumption will be crucial, as uncertainties in global demand may affect PRC exports.
Inflation in China is now forecast at 0% for 2025, down from 0.4% in April, and 0.4% for 2026, down from 0.7%, reflecting ongoing food price deflation and subdued domestic demand.
Downside risks to the outlook persist, with global trade conditions and policy uncertainties posing challenges. Timely implementation of stimulus measures and reforms, as discussed during the July Politburo meeting, is essential to counter potential headwinds.
ADB, established in 1966 and owned by 69 members, supports inclusive, resilient, and sustainable growth across Asia and the Pacific. The bank works with its members and partners to address complex challenges through innovative financial tools and strategic partnerships, aiming to enhance infrastructure, improve lives, and safeguard the environment.
