Citing “stronger than expected” consumption in the third quarter, the International Monetary Fund (IMF) raised its forecasts for China’s gross domestic product growth rate to 5.4 per cent for 2023 and 4.6 per cent in 2024, but still advised a “hastened” restructuring in the property sector on Tuesday in Beijing.
“Third quarter GDP growth came out stronger than we expected, and it was driven by stronger consumption that we had expected,” IMF first deputy managing director Gita Gopinath said in Beijing on Tuesday.
The latest projections were made after the Washington-based organisation completed its China stop under its Article IV Mission, which sends economists to member countries to monitor economic and financial policies and provide recommendations.
However, the IMF still expects China’s growth to continue to slow next year and to slow to “about 3.5 per cent” amid “headwinds from weak productivity growth” in the medium term.
“So far for this year, we have quite a strong contribution of consumption to growth, and this proportion we expect to decline a little bit next year,” said Sonali Jain-Chandra, the IMF’s mission chief for China.
“The reason is this year, the consumption was very strong given the low base effect from reopening post pandemic.”
Gopinath added that the continued weakness in China’s property sector and subdued external demand would continue to slow China’s economic growth.
The medium projection could rise again if China adopts “pro-market structural reforms”, Gopinath added.
“It will certainly inject fresh and positive energy into the global economic recovery,” said He.
“China’s development itself has global significance.”
Additional reporting by Li Jiaxing
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November 07, 2023 at 07:00PM
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China’s GDP forecasts raised by IMF, but property sector woes may hinder growth - South China Morning Post
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