IMF raises China growth forecast due to determined policyStaff Writer | July 23, 2016
The International Monetary Fund (IMF) increased its growth forecast for China in 2016 due to the country's "determined and decisive" implementation of reforms and the "steady" support for the economy.
Economy in China China to grow 6.6 percent in 2016
Managing director Christine Lagarde made her remarks when she met the press together with Chinese Premier Li Keqiang and other five chiefs of international financial institutions after a round-table meeting at Diaoyutai State Guesthouse in Beijing.
She said the IMF had increased the growth forecast for China in 2016 by 0.1 percentage point to 6.6 percent for two reasons; "First of all, we have witnessed the determined and decisive implementation of reforms; and second, there was also support given to the economy in order to encourage growth to go forward."
"On the latter point, it did not take the form of vast fiscal stimulus but simply some solid and steady support in order to make sure that growth was indeed sustainable," she added.
The IMF on Tuesday revised down its forecast for global growth in 2016 and 2017, due to the uncertainty surrounding Britain's exit from the European Union (Brexit).
The IMF expects the global economy to grow 3.1 percent in 2016 and 3.4 percent in 2017, both 0.1 percentage points lower than its forecasts in April, according to its updated World Economic Outlook report.
Meanwhile, the IMF revised China's economic growth forecast this year to 6.6 percent from its April's forecast of 6.5 percent, saying that the near-term outlook has improved due to recent policy support.
Lagarde said the IMF's new forecast was now within the government's range of between 6.5 percent and 7 percent.
"This is clearly an achievement and I'm very pleased to acknowledge this," she said.
Lagarde said she would have revised upward the forecast for global growth for the first time in six years as China, Japan and the Euro area were doing better than expected. However, she failed to do so due to Brexit.
"What is even more disappointing is that we have conducted some scenarios. Under our severe scenarios, the global growth for next year would be reduced by 0.5 percentage point," she said.
This is the first time a "1+6" round-table meeting has been held in China. The theme of the meeting was "promoting strong, sustainable, and balanced growth of the Chinese and global economy." ■