IMF lifts Chinese growth forecasts, but calls for urgent economic reforms

(Sharecast News) - The International Monetary Fund has raised its growth forecasts for China for the next two years, but urged Beijing's leaders to accelerate the structural economic reforms to shift to a consumption-led model. Chinese gross domestic product is now expected to expand by 5.0% in 2025, up from earlier projects for 4.8% growth, before increasing 4.5% in 2026, up from 4.2% previously.

"China's economy has shown notable resilience despite facing multiple shocks in recent years," said the IMF's mission chief for China, Sonali Jain-Chandra.

However, the export-led economy which this week announced that its trade surplus had topped $1trn for the first time is under increasing pressure to change its overreliance on shipping cheap goods overseas.

"China's large economic size and heightened global trade tensions make reliance on exports less viable for sustaining robust growth," the IMF said.

Moving to a consumption-led model "requires more urgent and forceful expansionary macroeconomic policies, reforms to reduce elevated household savings, and a scaling back of inefficient investment and unwarranted industrial policy support."