Growth in China projected to slow to 4.6% in 2024, 3.5% in 2028: IMF

Source:China Sport ShowRelease time:18-Feb-2024Clicks:

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Growth in China is projected to slow to 4.6 per cent this year amid the ongoing weakness in the property sector and subdued external demand, according to the International Monetary Fund (IMF), whose executive board concluded the 2023 Article IV Consultation with the country last month.

Over the medium term, growth is projected to gradually decline further and is projected at about 3.5 per cent in 2028 amid headwinds from weak productivity and population aging.

While inflation fell last year, largely on account of lower energy and food prices, it is expected to increase gradually to 1.3 percent this year as the output gap narrows and the base effects of commodity prices recede, IMS said in a release.

Uncertainty surrounding the outlook is high, particularly given the existing large imbalances and associated vulnerabilities, it noted.

Greater-than-expected weakening of external demand, tightening of global conditions and increased geopolitical tensions also pose considerable downside risks.

On the upside, decisive policy action could boost confidence and lead to a better-than-expected rebound in private investment.

IMF directors noted that reducing the stock of local government debt would require greater use of insolvency tools and enhancements in the financial safety net.

They underscored that a strategy to address weak banks and strengthen the legal framework for bank resolution, along with measures to enhance the financial safety net and crisis preparedness capacity, would safeguard macro financial stability.

They emphasised that addressing remaining data gaps would help enhance data transparency and facilitate policymaking.