BEIJING: China’s economic slowdown is likely to persist in the coming years as the Asian giant struggles with sagging productivity and a rapidly ageing population, the International Monetary Fund (IMF) said Friday (Feb 2).
The world’s second-largest economy last year saw some of its slowest growth in decades, as a debt crisis in the property sector added to geopolitical tensions and weakening global demand.
And an IMF report on Friday forecast growth to decline further to 3.5 per cent by 2028 “amid headwinds from weak productivity and population ageing”, adding that “uncertainty surrounding the outlook is high”.
It previously forecast growth of 4.6 per cent for this year.
Driving the slowdown is a years-long crisis in the country’s real estate market, once a key growth pillar but now mired in debts that may threaten China’s financial system.
Property giant Evergrande has become a symbol of the sector’s woes, racking up astronomical debts of more than US$300 billion.
A court in Hong Kong this week issued an order that should kickstart the liquidation of Evergrande’s overseas assets, though the company insisted the decision would not affect its domestic operations.