China’s economic growth is estimated to hit 5.4% in 2023 said IMF recently.
The fund raised its forecast for China’s economic growth after the country’s better-than-expected Q3 growth and Beijing’s move to approve a 1 trillion yuan (US$137 billion) sovereign bond issue and allow local governments to frontload part of their 2024 bond quotas.
But the IMF expects growth—dragged down by the weak property market and subdued external demand—to slow to 4.6% next year.
"We have revised up growth by 0.4 percentage points in both years relative to our October WEO projections, reflecting stronger than expected growth in the third quarter and the new policy support that was recently announced,” IMF's First Deputy Managing Director Gita Gopinath said in Beijing.
The country’s medium-term growth is estimated to slow to about 3.5% by 2028 against the backdrop of weak productivity and population ageing, Gopinath said during a news conference to mark the release of the fund's "Article IV" review of China's economic policies.
China’s local debt has reached 92 trillion yuan (US$12.6 trillion), or 76% of China's economic output in 2022, up from 62.2% in 2019.
In response to the growing local debt, China’s Politburo said earlier this year that measures would be announced to reduct debt risks.
"The central government should implement coordinated fiscal framework reforms and balance-sheet restructuring to address local government debt strains, including closing local government fiscal gaps and controlling the flow of debt," said Gopinath.
