The International Monetary Fund today raised its economic growth forecasts for China to 5.4 per cent in 2023 and 4.6 per cent in 2024.

In October, the Washington-based financial body downgraded the China’s growth forecast to 5.0 per cent and 4.2 per cent in 2023 and 2024, respectively. However, in an official statement this morning, the IMF conceded that Gross Domestic Product (GDP) growth could slow to 4.6 per cent in 2024 because of continued weakness in China’s property sector and subdued external demand,

The IMF’s upward revision followed a decision by China to approve a 1 trillion yuan (US$137 billion) sovereign bond issue and allow local governments to frontload part of their 2024 bond quotas, in a move to support the economy.

IMF’s First Deputy Managing Director Gita Gopinath explains that these projections reflect upward revisions of 0.4 percentage points in both 2023 and 2024 relative to October World Economic Outlook projections due to a stronger-than-expected third-quarter outturn and recent policy announcements.

She points out that China has introduced numerous measures to support the property market citing that more is needed to secure a quicker recovery and lower economic costs during the transition.

Gopinath highlights that a comprehensive policy package should include measures to accelerate the exit of nonviable property developers, remove impediments to housing price adjustment, allocate additional central government funding for housing completion, and assist viable developers to repair balance sheets and adapt to a smaller property market.

On October 30, the IMF released its economic projections, stating that global growth is expected to remain at three per cent in 2023 and further decline to 2.9 per cent in 2024. This marked one of the lowest growth rates in decades.

According to the IMF’s Navigating Global Divergences report for October 2023, substantial economic recovery on a global scale faces significant challenges. The baseline forecast indicates a slowdown in global growth from 3.5 per cent in 2022 to three per cent in 2023, and 2.9 per cent in 2024, falling below the historical average of 3.8 per cent recorded between 2000 and 2019.