Kuala Lumpur, July 24 (IANS) The International Monetary Fund (IMF) has revised China’s growth forecast for 2017 and 2018 to 6.7 and 6.4 per cent respectively.
The World Economic Outlook report, which came days after China posted a stronger-than-expected second quarterly performance, was a reflection of a solid first quarter underpinned by previous policy easing and supply-side reforms, including efforts to reduce excess capacity in the industrial sector, Xinhua news agency cited the IMF as saying on Monday.
China has set its full-year growth target at “around 6.5 per cent”. The 6.7 per cent forecast will leave the world’s second-largest economy on par with its growth level in 2016.
The fund also revised China’s economic forecast for 2018 by 0.2 percentage point to 6.4 per cent, citing expectations that Beijing may maintain high public investment and delay fiscal adjustment to meet its target of doubling the 2010 real GDP by 2020.
The IMF has also warned against strong credit growth that may come with rising downside risk to medium-term growth.
Maurice Obstfeld, chief economist of the IMF, recommended China go through a very important rebalancing process, which will inevitably entail a slowing path of growth.
He said China’s recent moves to redress non-performing loans and a coordinated financial oversight overhaul were welcome.
The revision followed an April upgrade by the IMF on China’s GDP growth forecast to 6.6 and 6.2 per cent for 2017 and 2018 respectively, 0.1 and 0.2 percentage point higher than its forecast in January.