ANN/CHINA DAILY – The International Monetary Fund (IMF) has forecasted China’s economy to grow at 3.2 per cent in 2022, then rise by 4.4 per cent for the next two years as the country’s growth remains under pressure following an “impressive” recovery from the pandemic’s initial impact.
The preliminary findings were released by the IMF on Tuesday, after a team led by its Mission Chief for China Sonali Jain-Chandra conducted “constructive” discussions virtually with senior Chinese government and banking officials, private business executives, and academics during an Article IV Consultation from November 2 to 16.
The consultation is based on Article IV of the IMF’s Articles of Agreement. It usually involves bilateral discussions between the IMF and a member to assess the latter’s economic health and financial risks.
“Under the zero-COVID strategy, China weathered the initial impact of the pandemic well, allowing the economy to recover swiftly from the early-2020 lockdowns and to expand the global supply of medical goods and durable goods significantly at a critical time for the global economy,” said, IMF’s first Deputy Managing Director Gita Gopinath.
“However, China’s growth has since slowed and remains under pressure amid recurring COVID outbreaks, deep challenges in the property sector and slowing global demand,” she said in a statement at the end of the virtual visit. Gopinath, who also held virtual meetings with several senior policy officials, said the zero-COVID strategy in China has become “nimbler” over time.
“Against this backdrop, growth is projected at 3.2 per cent for 2022, increasing to 4.4 per cent in 2023 and 2024, under the assumption that the current zero-COVID strategy will be gradually and safely lifted in the second half of 2023,” she said.
In its World Economic Outlook released earlier last month, the IMF forecasts China’s overall growth domestic product growth will align with the global projected pace in 2022, but growth is 1.7 percentage points higher than the projected global average in 2023.
China also faces external headwinds from a global slowdown, a further rise in energy prices and more tightening in global financial conditions, according to the IMF statement.
It said that in the longer term, rising tensions pose risks of fragmentation through financial decoupling pressures and limits to trade, foreign direct investment and knowledge exchange around technology.
China’s gross domestic products expanded by three per cent year-on-year in the first three quarters, compared with 2.5 per cent in the first half of the year, according to the National Bureau of Statistics data, which indicated that the economy has shown resilience despite some downside risks.