Imf Surprised By China Growth

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Imf Surprised By China Growth

Imf Surprised By China'S Growth Of 5%

The 5% economic growth of China during 2024 was also a positive surprise, even for the IMF. The IMF had forecasted a growth rate of 4.8% for the Chinese economy, but the actual data was +0.2% higher.

For the year 2025, the IMF has set a growth target of 4.6% for China, while the 2026 target is set at 4.5%. This will depend on the fiscal measures of the Chinese government.

China At Risk Of Trade Policy Uncertainty

However, the one key factor that casts uncertainty over these forecasts is the trade policy uncertainty.

The IMF also stressed the need for China to drive more of its growth from the domestic demand. If we look back, IMF has been saying this thing for several years now but it has yet to materialize.

After all, China can't sustain its growth via external trade for a long period of time. Also, China has already faced issues in the form of weak global demand and economic downturns around the world.

So, China needs to take measures in order to drive growth from its own domestic demand. It seems that China is also working towards that direction but there's still a lot more to do!

It is also worth noting that weakness in the economy of China will also affect other countries. This also includes the developing countries along with Australia and New Zealand.

IMF believes that the growth rate of China will stabilize in 2026 near 4.5%. However, the one factor that puts this forecast at risk is the declining labor supply as the population is aging fast.

To counter this, China is planning to increase the retirement age to 63 for men. For men, the age will be increased to 58. These measures will allow the China to improve the labor supply but it also highlights that China needs to take additional measures.

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