IMF Upgrades China's GDP Growth Forecasts but Warns of Risks Ahead

• China's economy is set to grow 5% this year, after a "strong" first quarter, the International Monetary Fund (IMF) said on Wednesday, upgrading its earlier forecast of 4.6% expansion though it expects slower growth in the years ahead.
• The global lender's new projections come as Beijing steps up efforts to shore up an uneven recovery in the world's second-biggest economy, which has stumbled in the face of a protracted property crisis and its ripple effects across investors, consumers and businesses.
• The IMF stated it revised up both its 2024 and 2025 GDP targets by 0.4% but warned that growth in China would slow to 3.3% by 2029 due to an ageing population and slower expansion in productivity. It now expects China's economy to grow 5% in 2024 and to slow to 4.5% in 2025.
• The IMF's upgrade for 2024 is in line with Beijing's growth target of "around" 5%, which the economy appears to be on track to reach after it blew past expectations to post growth of 5.3% in the first quarter. But deflationary pressures continue to loom large, and a protracted property crisis remains a major drag on growth.
• The property sector crisis remains the biggest stumbling block to a full-blown economic revival, analysts say, and the IMF issued a warning about the risks ahead. "Risks to the outlook are tilted to the downside, including from a greater or longer-than-expected property sector readjustment and increasing fragmentation pressures," Gopinath said.

(Source: Reuters)