The International Monetary Fund raised its growth forecast for China on Tuesday but again warned of risks stemming from the build-up of debt in the world’s second largest economy. The fund’s latest World Economic Outlook gives President Xi Jinping a boost but also a warning as…
The International Monetary Fund raised its growth forecast for China on Tuesday but again warned of risks stemming from the build-up of debt in the world’s second largest economy.
The fund’s latest World Economic Outlook gives President Xi Jinping a boost but also a warning as he prepares to accept a second five-year term as general secretary of the Communist Party at a major congress next week.
The report also projects strengthening economic growth across most of Asia, raising its forecast for Japan but reducing it for India.
The fund expects China’s economy to expand by 6.8% this year, up from its previous estimate of 6.7%, due to stronger recorded growth in the first half.
If realised, the growth rate will outdo last year’s 6.7%, which was China’s slowest pace of expansion since 1990.
For 2018 the IMF raised its estimate to 6.5% from the 6.4% forecast in its July World Economic Outlook.
In raising the growth targets, the fund said it expects authorities to maintain a high level of investment-fuelled growth „to meet their target of doubling real GDP between 2010 and 2020“.
The uptick in growth will result in greater debt levels over the long term, the IMF said in the report, raising the prospect of a „sharp growth slowdown in China“.
