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IMF: China’s economy rebounds strongly

BEIJING (ANN/CHINA DAILY) – Following the post-COVID reopening, China’s economic activity surged in 2023, with real GDP growth estimated to align closely with the government’s target of approximately five per cent, according to the executive board of the International Monetary Fund (IMF). 

The IMF conveyed this assessment in a recent press release, marking the conclusion of its annual Article IV review of the Chinese economy. 

The recovery, as outlined in the statement published on the IMF website, was primarily propelled by domestic demand, notably private consumption, and bolstered by accommodating macroeconomic measures. 

These included further monetary policy relaxation, tax relief initiatives for both businesses and households, and fiscal allocations toward disaster relief efforts.

The statement said that while inflation fell in 2023, largely due to decreased energy and food prices, it is expected to increase gradually to 1.3 percent in 2024 as the output gap narrows and the base effects of commodity prices recede.

Decisive policy action, including accelerated restructuring in the property sector, could boost confidence and lead to a better-than-expected rebound in private investment, the statement said.

An IMF team visited China from October 26 to November 7 to undertake the 2023 Article IV consultation.

The team held constructive discussions with senior officials from the government and the People’s Bank of China, as well as private sector representatives and academics, to exchange views on China’s economic prospects and risks, reform progress and challenges, and policy responses.

An employee works on a production line at a factory producing strollers at a factory in Handan, in northern China’s Hebei province on February 29, 2024. PHOTO: AFP