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IMF revises China's two-year economic growth upwards, cites strong GDP

By Al Mayadeen English
Source: Agencies
30 May 2024 08:19

The global financial organization says China's economic risks are tilted to the downside.

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The seal for the International Monetary Fund (IMF) in Washington, D.C., United States, January 26, 2022. (AFP)

The International Monetary Fund (IMF) revised China's economic growth upwards for the next two years after the Asian giant's quarter 1 data revealed a strong GDP.

The IMF expects China's 2024 average to be 5 percent and 2025's to be 4.5 percent, a 0.4 percent increase for both years from earlier estimates released in April.

"Core inflation is expected to rise but stay low as output remaining below potential," the global financial organization said after finalizing its Article IV mission to China. "Risks are tilted to the downside, including from greater- or longer-than-expected property sector adjustment and increasing fragmentation pressures."

It highlighted that the Asian giant's urgent priorities are to implement policies for adjusting the property sector and to provide macroeconomic support to boost local demand and mitigate risks.

"Key priorities include rebalancing the economy towards consumption by strengthening the social safety net, liberalizing the services sector, and scaling back distortive supply side policies that support the manufacturing sectors," it said.

But the IMF noted that, by 2029, China's economic growth is expected to decline to 3.3 percent, citing aging and slower productivity growth.

The Director of the IMF, Kristalina Georgieva, said last year that China will contribute significantly to global economic development, making up approximately one-third of it in 2023. The "strong rebound" in the Chinese economy, according to Georgieva, is significant for the entire world.

She emphasized that the country's recovery provides a welcome boost to the global economy, noting that, according to an IMF study, an increase in China's GDP growth of one percentage point results in average growth of three percentage points in other Asian nations.

China's trade surplus increased by 30% last year, reaching an all-time high of $877.6 billion, Sputnik reported earlier this year according to calculations based on data from national statistics.