NEW YORK – China will see its economic growth improve next year as industrial restructuring pays off, a New York-based business research group said Thursday.
China’s campaign to eliminate overcapacity has started to pay dividends and that will contribute a lot to the country’s economic improvement, said Erik Lundh, a senior economist at The Conference Board.
He added that more productivity growth in the country will be seen over the next decade, mitigating the impact of continued GDP deceleration.
The world will likely see an economic growth of 2.5 percent in 2020, and an average of 2.7 percent for the next decade, down from 3.3 percent from 2010 to 2019, according to the outlook report.
“Even though recession fears are widespread, we expect some recovery in 2020 as China’s overcapacity problem is being addressed, supply chains are getting restructured, the risk of an escalation of trade disputes recedes, and productivity growth continues to recover,” said Bart van Ark, chief economist of the research group.
The 2020-2029 average for advanced economies is estimated at 1.9 percent while the trend projection for emerging markets and developing economies combined is 3.5 percent, said the report.
Key factors determining the long-term growth potential of the global economy include trends in labor supply and migration, adoption of digital technologies, distribution of income, and multiple pressures on the environment and productivity growth, said the research group.