The International Monetary Fund (IMF) lifted its economic growth projections for China in its latest review published on Wednesday, citing stronger policy support and softer-than-expected foreign tariffs. The Fund now expects the world’s second-largest economy to expand faster in both 2025 and 2026.
Key highlights
The IMF noted that China’s unusually low inflation compared with its trading partners has contributed to a real exchange-rate depreciation, supporting competitiveness.
It emphasized that Beijing’s top policy priority should be accelerating the shift toward a consumption-driven growth model, reducing the long-standing dependence on exports and investment.
The Fund upgraded China’s 2026 growth forecast to 4.5% from 4.2% and lifted the 2025 outlook to 5.0% from 4.8%, attributing the revisions to ongoing macroeconomic stimulus and lower-than-expected tariffs imposed on Chinese goods.
The report also urged authorities to continue balance-sheet cleanup across the general government, property and financial sectors.
Additionally, the IMF called for more forceful expansionary macroeconomic policies and structural reforms aimed at lowering China’s elevated household savings rate.
Despite the improved forecasts, the IMF warned that significant economic imbalances persist and reiterated the need for a faster transition toward consumption-led growth.
Ready to start trading Forex? Join iXBroker today and kick-start your trading journey now!
