China will likely become the only major economy in the world with growth accelerating in 2023, and its economic recovery is brightening the outlook for the whole region, economists of the Asian Development Bank said in Beijing.

The Asian Development Outlook April 2023, the ADB's flagship annual economic publication which was released on Tuesday, predicted that the economic growth in China will increase to 5 percent in 2023, while the economies in Asia and the Pacific are projected to grow 4.8 percent this year. Excluding China, other developing economies in Asia are expected to grow 4.6 percent.

"China's recovery is not only important for the country but also...for lifting the growth prospects of the entire Asia-Pacific region, and the world at large," said Safdar Parvez, the ADB's country director for China.

According to him, China's economic recovery will be mainly driven by the consumption demand rebound. However, fiscal spending — such as infrastructure investment — will still be required in the short run to catalyze the recovery, as external demand may ease in 2023 once growth in advanced economies cools.

Akiko Terada-Hagiwara, head of the economics and strategy unit for the ADB resident mission in China, suggested that the country take a slew of reform measures to boost its potential growth rate in the coming years, including raising the retirement age, improving education, expanding market access for foreign investors and promoting research and development.

She emphasized that the ADB still expects capital to be the most important contributor to future growth, and it is important for China to "relocate capital to sectors with a higher return". Compared with other countries, she expects the inflation rate to be moderate in China — at 2.2 percent this year and 2 percent in 2024.

To accelerate the ongoing economic recovery, Parvez suggested that China boost consumer confidence through measures such as strengthening the social protection system and improving access to social and public services.

He also said that China should continue to stabilize the housing market and boost investment, particularly in local regions where government debt levels are high.

In December, the ADB had forecast China's 2023 growth to be 4.3 percent. It became more optimistic on the Chinese economy after the country optimized its COVID-19 response measures and official economic data reflected steady recovery amid policy measures promoting growth, Parvez said.

According to the National Bureau of Statistics, improvement already occurred in key economic indicators during the January-February period, including value-added industrial output (up by 2.4percent year-on-year), retail sales (up by 3.5 percent year-on-year) and fixed-asset investment (up by 5.5 percent year-on-year).

China's economic rebound has further consolidated foreign investors' confidence in the world's second-largest economy.

French company L'Oreal Group recently announced its plan to build a new 45,000 square meter operation center in Nantong, Jiangsu province. The center, which is expected to open in 2025, aims to enhance online and offline sales of the company's premium products in China.

"China's expanding high-level opening-up shows encouraging signs of a rebound.... We continue to firm up our confidence in China, commit to contributing to China and innovate with China as always," said Fabrice Megarbane, president of L'Oreal North Asia Zone and CEO of L'Oreal China.

Jiang Xueqing contributed to this story.