"IMF Raises China's Growth Rate to 5% for This Year, Strong First Quarter"

The International Monetary Fund (IMF) has revised upward its forecast for China's economic growth rate this year to 5%. This adjustment comes as the growth in the first quarter was stronger than expected, supported by robust exports.

According to economic media CNBC and others, the IMF raised China's growth rate for this year by 0.4 percentage points from the previous forecast of 4.6% to 5% in a report released on the 29th. The growth rate for next year was also increased from 4.1% to 4.5%. This upward revision was made shortly after the IMF's regular assessment visit to China. The 5% growth this year aligns with the Chinese authorities' target of around 5%.

Gita Gopinath, IMF's First Deputy Managing Director, explained in a statement that "the 0.4 percentage point upward revision compared to the April forecast is due to the strong growth of 5.3% in the first quarter's Gross Domestic Product (GDP) and recently adopted related policy measures." The industrial activity indicators in April also showed signs of recovery.

However, the IMF expects China's growth rate to slow to 3.3% by 2029 due to population aging and productivity slowdown. This is below the IMF's previous medium-term growth forecast of 3.5%.

Deputy Managing Director Gopinath noted that the adjustment in China's real estate market has been larger and more prolonged than expected, and that downside risks continue amid pressures from global fragmentation. She added, "Short-term macroeconomic policies should be adjusted to support domestic demand and mitigate downside risks. Fundamental structural reforms are necessary," emphasizing the need for more comprehensive policy measures.

Additionally, regarding issues of overproduction and unfair practices pointed out by the United States, the European Union (EU), and others, she warned that "if China uses industrial policies to support key industries, it could lead to misallocation of domestic resources or affect trade partners."