IMF Addresses Growth Outlook for China

(MENAFN) The International Monetary Fund (IMF) stated on Wednesday that China's enormous economic scale, together with escalating global trade frictions, makes dependence on exports less sustainable for long-term expansion.

"Long-standing structural challenges will also weigh on the economy over the medium term. Growth is expected to moderate due to slowing productivity growth, an aging population, elevated debt levels, and decreasing returns to investment," the organization said in its statement.

Acknowledging that China’s economy has demonstrated remarkable resilience despite encountering numerous shocks in recent years, the IMF projected a growth rate of 5% in 2025 and 4.5% in 2026.

"These reflect upward revisions of 0.2 and 0.3 percentage points, respectively, from the IMF’s October WEO (World Economic Outlook), driven by recently announced policy measures and reduced US-China bilateral tariffs. Headline inflation is expected to rise modestly from an average of 0% in 2025 to 0.8% in 2026," the IMF noted.

The fund underscored that ongoing imbalances are challenging the economy’s resilience. Weak domestic demand and deflationary pressures have emerged from the prolonged property market adjustment, impacts on local government budgets, and subdued consumer confidence.

"The authorities recognize the imperative of increasing consumption as a driver of growth. To this end, they have implemented welcome policy measures," the IMF added.

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