China's economic growth 'resilient' at 5%

China's economic growth is expected to remain "resilient" at 5% this year, thanks to positive first-quarter data and recent policy measures, the International Monetary Fund (IMF) said on May 28 after its team concluded a visit to the East Asian country.

The latest forecast reflects a 0.4 percentage point upward revision from the IMF's previous forecast released in April. The world's largest lender now expects China's economy to grow by 4.5% in 2025, also a 0.4 percentage point upward revision, the IMF team said in preliminary findings released at the end of a consultation visit (May 16-28).

Consultations, based on Article IV of the IMF's Articles of Agreement, typically involve bilateral discussions between the IMF and a member to assess that member's economic health and financial risks.

“China’s economic development over the past few decades has been remarkable, driven by market-oriented reforms, trade liberalization and integration into global supply chains,” IMF First Deputy Managing Director Gita Gopinath said in a statement.

View of Lujiazui financial district in Shanghai Free Trade Pilot Zone, China, January 2023. Photo: Xinhua

Ms. Gopinath participated in policy discussions and met with Chinese government and bank officials during the consultations. According to the IMF official, China’s recent achievements have been accompanied by “growing imbalances and vulnerabilities” and “headwinds” to growth.

“Recognizing these challenges, the authorities have focused on achieving high-quality growth by supporting innovation, especially in green and high-tech sectors, upgrading regulations in the financial sector, and introducing a number of policies to reduce risks in assets and local governments,” said Ms. Gopinath.

The IMF official also recommended that a more comprehensive and balanced policy approach would help China overcome the “headwinds” its economy is facing.

Over the medium term, growth is expected to slow to 3.3% by 2029 due to an aging population and slower productivity growth, the organization said. Moreover, risks to growth are on the upside, including a larger or more prolonged than expected adjustment in the real estate sector and increasing fragmentation pressures, the IMF said.

China's economy grew faster than expected at a 5.3% year-on-year pace in the first quarter of 2024, beating analysts' forecasts of a 4.6% gain in a Reuters poll and up from 5.2% in the previous quarter (fourth quarter of 2023).

A series of recent economic indicators in April this year, including factory output, trade and consumer prices, showed that the $18.6 trillion economy has successfully weathered some short-term recession risks, but China watchers said it was still unclear whether the recovery was sustainable.

However, following China's strong growth results in the first quarter of 2024, a group of organizations such as Goldman Sachs, Citigroup and Bank of America have all raised their full-year GDP growth outlook for the world's second largest economy to 5% .

Minh Duc (According to China Daily, Reuters)

Source: https://www.nguoiduatin.vn/tang-truong-kinh-te-trung-quoc-kien-cuong-o-muc-5-a665822.html