IMF raises China’s GDP growth forecast, citing first-quarter strength and stimulus

The International Monetary Fund (IMF) has raised its economic growth forecast for China for 2024 and 2025, citing strong first-quarter GDP and stimulus measures taken by Beijing.

The fund said it now expects GDP in the world’s second-largest economy to grow by 5% in 2024 and 4.5% in 2025, an increase of 0.4 percentage points in each case compared to the previous forecast .

It also said downside risks in the real estate sector had “tilted to the downside.”

IMF’s Gopinath notes China’s support for ‘priority sectors’

However, IMF first deputy managing director Gita Gopinath said the fund expects China’s economic growth to slow to 3.3% by 2029 due to an aging population and slower productivity growth, and warned that “using China’s industrial policy to supporting priority sectors” could lead to “a misallocation of national resources and potentially impact trading partners.”

Treasury Secretary Yellen highlighted concerns about dumping in China

During her April visit to China, U.S. Treasury Secretary Janet Yellen highlighted concerns about the global economic fallout from China’s overcapacity. Earlier this month, the Biden administration raised tariffs on a wide range of Chinese imports, including electric vehicles and semiconductors.

Meanwhile, China is trying to breathe life into its housing market. Earlier this month, China introduced its toughest measures yet to tackle real estate problems, easing mortgage rules and encouraging city and local governments to buy unsold homes to turn them into affordable housing.