The International Monetary Fund (IMF) has revised China’s gross domestic product (GDP) growth forecasts for 2023 and 2024. The IMF now anticipates China’s GDP to grow at a rate of 5.4% in 2023 and 4.6% in 2024. This is an upward adjustment from its previous projections made in October, when it had lowered its forecast to 5% for 2023 and 4.2% for 2024.
The IMF’s statement cited potential factors leading to a slower growth rate of 4.6% in 2024, including ongoing weaknesses in China’s property sector and reduced external demand, as reported by Reuters.
The revised projections are partly a response to China’s recent approval of a 1 trillion yuan ($137 billion) sovereign bond issuance and its decision to enable local governments to advance a portion of their 2024 bond quotas, aimed at providing support to the nation’s economy.
Gita Gopinath, the First Deputy Managing Director of the IMF, noted that these updated forecasts reflect a 0.4 percentage point upward revision for both 2023 and 2024 compared to the October projections. This revision was attributed to a more robust-than-expected performance in the third quarter of the year and recent policy announcements.
To further bolster China’s economic recovery and minimize transition-related economic challenges, Gopinath suggested a comprehensive policy package, which includes expediting the exit of nonviable property developers, addressing hindrances to housing price adjustments, allocating additional central government funding for housing completion, and providing support for viable developers to adapt to a smaller property market.
The IMF’s economic projections, released on October 30, indicated that global growth is anticipated to remain at 3% in 2023, with a further decline to 2.9% in 2024. These forecasts represent a departure from the historical average growth rate of 3.8% recorded between 2000 and 2019, reflecting the substantial economic challenges facing global recovery.
