IMF lowers China 2024 growth forecast, warns property woes 'could worsen'
Tuesday’s projection remains below the official target set by Beijing, and well below the double-digit increases that drove the country’s rise to a global economic powerhouse
THE International Monetary Fund (IMF) revised its forecast for China’s growth this year down slightly to 4.8 per cent on Tuesday (Oct 22), warning that a persistent downturn in the real estate sector could potentially worsen.
China’s leaders are targeting annual growth of 5 per cent this year – a goal challenged by weak consumption, and a prolonged and debilitating debt crisis in the colossal property sector.
Last week, Beijing posted its slowest quarterly growth in a year and a half, and acknowledged “new problems” were hampering economic development.
The IMF on Tuesday said it had revised its growth estimate for China down from a 5 per cent assessment in July.
“Despite persisting weakness in the real estate sector and low consumer confidence, growth is projected to have slowed only marginally to 4.8 per cent in 2024,” the fund said in its World Economic Outlook report on Tuesday.
The fund had initially predicted in April growth of 4.6 per cent this year.
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Tuesday’s projection remains below the official target set by Beijing, and well below the double-digit increases that drove China’s rise to a global economic powerhouse.
Last year, China logged 5.2 per cent growth – one of its worst annual economic performances in more than three decades.
Growth in the country’s economy is expected to slow further in 2025, the IMF report said, leaving its July estimate of a 4.5 per cent expansion next year unchanged.
Beijing has in recent weeks unveiled a slew of measures to reignite the economy, but failed to offer more concrete details about the long-awaited “bazooka” stimulus.
The IMF on Tuesday pointed to recent policy measures by Chinese authorities as a factor that may provide a boost to “near-term growth”.
But it cautioned a years-long crisis in the housing sector continued to pose a major risk to growth.
“Conditions for the real estate market could worsen, with further price corrections taking place amid a contraction in sales and investment,” the fund said.
“This could cause domestic demand to falter, with negative spillovers to both advanced and emerging market economies, given China’s rising footprint in global trade,” it added.
Recent weeks have seen Beijing unveil a raft of measures to funnel cash into the economy, including a string of rate cuts and loosened restrictions on home buying.
Official data showed that new home prices fell year on year in September in 68 of 70 large and medium-sized cities surveyed by authorities.
Other headwinds facing the Chinese economy this year are sluggish consumer spending, raising fears of deflation, minimal growth in imports and high youth unemployment. AFP
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