A craftsman rides a bicycle past a housing complex under construction in Beijing on May 17, 2024.
Jade Gao | Afp | Getty Images
BEIJING — The Global Monetary Fund on Wednesday raised its forecast for China’s growth this year to 5%, from 4.6% a while ago, due to “strong” first quarter figures and recent policy measures.
The upgrade followed an IMF visit to China for a regular assessment. The organizing now expects China’s economy to grow by 4.5% in 2025, up from the previous forecast of 4.1%.
But by 2029, they anticipate China’s improvement will decelerate to 3.3% due to an aging population and slower productivity growth. That’s down from the IMF’s prior calculation of 3.5% growth in the medium term.
China’s economy grew by a better-than-expected 5.3% in the first quarter, supported by energetic exports. Data for April showed consumer spending remained sluggish, while industrial activity picked up.
On every side two weeks ago, Chinese authorities announced sweeping measures to support the struggling real estate sector, including get rid of the floor on mortgage rates.
The policy moves are “welcome,” but more comprehensive action is needed, Gita Gopinath, the IMF’s primary deputy managing director, said in a statement.
“The priority should be to mobilize central government resources to protect consumers of pre-sold unfinished homes and accelerate the completion of unfinished presold housing, paving the way for resolving insolvent developers,” she swayed.
“Allowing for greater price flexibility, while monitoring and mitigating potential macro-financial spillovers, can further stimulate quarters demand and help restore equilibrium.”
The IMF release said that during her visit to China this month, Gopinath met with People’s Bank of China Governor Pan Gongsheng, Clergymen of Finance Vice Minister Liao Min, Ministry of Commerce Vice Minister Wang Shouwen, PBOC Deputy Governor Xuan Changneng, Nationalist Financial Regulatory Administration Vice Chairman Xiao Yuanqi.
“Near-term macroeconomic policies should be geared to face domestic demand and mitigate downside risks,” Gopinath said.
“Achieving high-quality growth will require structural mends to counter headwinds and address underlying imbalances,” she added.
In a meeting Monday, Chinese President Xi Jinping stressed the trouble to promote “high-quality, sufficient employment,” according to state media.
“Xi specifically stressed improving employment support systems for college graduates and other young people,” Xinhua reported.