BEIJING: The International Monetary Fund increased its forecast for China’s 2023 gross domestic product growth from 5 % to 5.4 % on Tuesday( Nov. 7 ) citing a” strong” post-COVID – 19 recovery, but it stated that it still anticipated the Chinese economy to slow down the following year.
The IMF’s World Economic Outlook ( WEO ) predicts that GDP growth may slow to 4.6 % in 2024 due to persistent property sector weakness and restrained external demand, though this is still better than its October projection of 4.2 %.
The upward revision came after China decided to support the economy by approving a 1 trillion yuan( US$ 137 billion ) sovereign bond issue and allowing local governments to frontload some of their 2024 bond quotas.
According to IMF First Deputy Managing Director Gita Gopinath in the speech,” These forecasts reflect forward adjustments of 0.4 percentage positions in both 2023 and 2024 relative to October WEO forecasts due to a stronger-than-expected third-quarter output and subsequent policy announcements.”
According to Gopinath, growth is anticipated to gradually decrease to approximately 3.5 percent by 2028 due to challenges from low production and population aging.
China has taken many steps to support the real estate market, but she added that more is required to ensure a quicker recovery and decrease transitional expenses.
According to Gopinath, a comprehensive policy package should include steps to hasten the departure of nonviable property developers, eliminate obstacles to price adjustment for housing, allot more funding from the central government to finish the housing project, and help practical developers adjust to the shrinkage of the real estate market.