The International Monetary Fund (IMF) has predicted that the Chinese economy is on track to grow by 5% in 2024 after recording a robust Q1 financial performance. Previously, the international lender forecast 4.6% growth for the country.
IMF Bumps Up Its Growth Estimate For China’s Economy
The updated estimation reportedly follows China’s efforts to brace its economy after the property market debacle. In its press statement, the IMF said:
First, we project China’s economy to grow by 5 percent in 2024 and 4.5 percent in 2025. These reflect upward revisions of 0.4 percentage points for both the years compared to the April world economic outlook projections, and it’s driven by a strong first quarter GDP growth in 2024 and recent policy measures.
These remarks were made at a conference in Beijing after the IMF’s annual review of China’s economy. Gita Gopinath, the IMF’s first deputy managing director, commented:
The upgrade that we have for this year mainly reflects the fact that first quarter GDP growth came in stronger than expected, and there were some additional policy measures that were recently announced.
Despite this positive forecast, the IMF warned that, based on an ageing population and slower productivity, China’s economic growth would likewise decelerate to 3.3% by 2029. According to a Reuters report, many analysts altered their annual growth projections for China after the publication of the Q1 results.
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Presently, the property market catastrophe still stands in the way of complete economic resuscitation. Gopinath highlighted this and said:
Risks to the outlook are tilted to the downside, including from a great or longer-than-expected property sector readjustment and increasing fragmentation pressures.
