The Chinese economy continued to face challenges as market indicators showed a downward trend despite efforts to revive the ailing property sector. The International Monetary Fund (IMF) recently predicted a slowdown in the Chinese economy for the upcoming years, with a forecasted growth rate of 4.6% this year, down from 5.2% in 2023. The IMF further projected a growth rate of 3.4% in 2028, primarily attributing the decline to a significant drop in housing starts due to a government crackdown on excessive borrowing since 2020.
According to the IMF report, housing starts have plummeted by more than 60% from pre-pandemic levels, a decline comparable to the largest housing busts witnessed in the last three decades globally. These findings are indicative of the current predicament faced by the Chinese property market. The negative sentiment was reflected in the stock market where Shanghai's benchmark composite index lost 1.5% and the Shenzhen market experienced a 3% decline, resulting in the worst week for Chinese stock markets in five years.
