The International Monetary Fund (IMF) on Wednesday upgraded China’s economic growth outlook, but said additional measures were needed to support the struggling property market.
Gita Gopinath, the IMF’s first deputy managing director, also sounded the alarm over China’s growing trade tensions with the US and the European Union.
Speaking at a press conference in Beijing, Gopinath said the fund saw ‘evidence of very rapid retaliation’ if any of these three major economies introduced an industrial policy. So we are in an area where the risk of having a fragmented trading system … is much greater,” he said.
The latest assessment came after Gopinath met with People’s Bank of China Governor Pan Gongsheng and several senior ministry officials during his visit to the country.
The IMF revised China’s GDP growth outlook to 5 per cent in 2024 and 4.5 per cent in 2025, both 0.4 percentage points higher than in April. The upgrades reflect strong first-quarter results and recent policy measures, such as subsidies to encourage consumers to trade in old goods and buy new ones. GDP grew by 5.3 per cent in the first quarter, putting China on track to meet this year’s growth target of “around 5 per cent”.
Meanwhile, the Chinese yuan fell to a six-month low against the US dollar on Wednesday. Gopinath said the depreciation of the exchange rate could help boost China’s low inflation. On whether a weaker currency would lead to more exports, Gopinath said that in China’s case, the impact would be limited if the domestic economy grows and leads to more imports of services.
