IMF ups 2024 China growth forecast as consumer spending, exports boom

The International Monetary Fund (IMF) on Tuesday revised its economic outlook for China’s economy upward, with a projected GDP growth rate of 5 per cent for 2024, a 0.4 percentage point up from its April projections.

This positive revision comes on the back of a strong showing in the first quarter, fueled by a surge in private consumption and robust exports.

China’s consumers are opening their wallets again, boosting domestic demand. Additionally, strong export performance, particularly in technology sectors, is providing a further tailwind to the economy.

However, the IMF’s optimism is tempered by a long-term view. China’s economic growth is expected to slow down in 2025, reaching 4.5 per cent, and continue to decelerate over the next five years. This projected slowdown is attributed to headwinds from a rapidly aging population and slowing productivity growth.

“For China, the IMF revised growth forecast upward to 5 percent in 2024, primarily on account of a rebound in private consumption and strong exports in the first quarter.” IMF’s July Economic Forecast Update read.

“In 2025, GDP is projected to slow to 4.5 percent, and to continue to decelerate over the medium term to 3.3 percent by 2029, because of headwinds from aging and slowing productivity growth.”

Attribution: IMF’s July Economic Forecast Update