IMF upgrades China's growth outlook for 2024 to 5 percent from 4.6 percent


(MENAFN) In its latest assessment, the International Monetary Fund (IMF) has upgraded its economic growth forecasts for China, projecting an average growth rate of 5 percent in 2024 and 4.5 percent in 2025. These upward revisions, each by 0.4 percentage points compared to previous April projections, reflect robust GDP data from the first quarter of the year and recent policy interventions.

The IMF's statement, following its completion of the Article IV mission to China, attributes the revised growth estimates to the country's strong economic performance and recent policy measures. While acknowledging expectations of a slight increase in core inflation, the IMF foresees it remaining subdued due to output staying below potential levels. However, the institution also highlights downside risks, particularly concerning the property sector's adjustment and growing fragmentation pressures.

Addressing these challenges, the IMF emphasizes China's immediate need to implement a comprehensive policy package to facilitate adjustments in the property sector. Additionally, it recommends providing adequate macroeconomic support to bolster domestic demand and mitigate potential risks. The pursuit of high-quality growth, the IMF contends, hinges on implementing broad structural reforms.

Central to these reforms are efforts to rebalance the economy towards consumption, strengthen the social safety net, and liberalize the services sector. The IMF also underscores the importance of scaling back distortive policies that currently support manufacturing sectors, advocating for a more balanced and sustainable growth trajectory.

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