Tuesday, May 21, 2024

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    Chinese economy expected to grow 8.1% in 2021, IMF says

    The International Monetary Fund (IMF) on Tuesday predicted that China’s economy would grow 8.1 percent in 2021, 0.1 percentage point lower than previously announced. in the October forecast, according to the latest update of its World Economic Outlook.

    China is one of the only economies to have returned from the fourth quarter of 2020 to the level of growth expected before the pandemic, and is “far ahead” of other major world economies, said Tuesday morning during a virtual press briefing Gita Gopinath, Chief Economist of the IMF.

    “”China has been very successful in containing the pandemic, and this has greatly contributed to quickly reviving economic activity,” Gopinath said in response to a question from Xinhua.

    “Effective political support has been provided (to the economic sector) in both fiscal and monetary policy terms,” Gopinath said, adding that Chinese exports have also increased as a result of these measures.

    Echoing Gopinath’s remarks, Malhar Nabar, division chief in the IMF’s Research Department, told reporters that China’s supportive policies had been “a major driver” of its “impressive recovery” in 2020.

    “Support for public infrastructure spending, as well as support for the most affected households and businesses, has been bolstered by the drastic measures taken by the People’s Bank of China to provide liquidity support and enable provisions. credit to remain strong, ”Nabar said.

    “In the future, we expect a gradual transfer of the recovery to private sector activities, which will start with a recovery in private investment. This has in fact already been seen in the second half of last year, and we expect this to continue, ”he explained.

    To consolidate the path to recovery, it is “of vital importance” for China to continue rebalancing its economy towards private consumption, and “perhaps even accelerate it” by making “efforts to strengthen the social safety net, ”he said.

    In the latest World Economic Outlook update, the IMF forecasts global economic growth of 5.5% in 2021, 0.3 percentage points higher than the October forecast.

    In 2022, China should also register a growth of 5.6%, against 4.2% for the entire world economy.

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