IMF raises China’s GDP growth forecast to 5% in ’24

The International Monetary Fund (IMF) raised China’s 2024 economic growth forecast to five per cent due to a strong first quarter and government stimulus measures, up from the previous 4.6 per cent, Bloomberg reported on Wednesday.

The IMF also upgraded its 2025 growth forecast to 4.5 per cent, up from the previous 4.1 per cent, in line with China’s target of around five per cent growth for the year.

China’s first-quarter GDP growth exceeded expectations at 5.3 per cent, but concerns linger over a sluggish housing market. While consumption is improving, private investment remains weak, especially in the property sector.

IMF’s Gita Gopinath noted that public investment is robust, but private investment is hampered by property sector challenges. The IMF urges Beijing to provide additional monetary and fiscal support, particularly to address the housing crisis.

To tackle the issue, the IMF suggests utilising central government resources to protect buyers of unfinished homes and expedite the completion of pre-sold housing projects to address insolvent developers.

Earlier this month, China announced initiatives to support the real estate market, including relaxed down-payment requirements and central bank funding to help local governments buy excess inventory.