IMF raises forecast but warns of debt risk
Print Edition
THE International Monetary Fund yesterday raised its growth forecast for China but again warned of risks stemming from the build-up of debt in the world’s second-largest economy.
The fund’s latest World Economic Outlook report also projects strengthening economic growth across most of Asia, raising its forecast for Japan but reducing it for India.
The fund expects China’s economy to expand by 6.8 percent this year, up from its previous estimate of 6.7 percent, due to stronger recorded growth in the first half.
If realized, the growth rate will outdo last year’s 6.7 percent, which was China’s slowest pace of expansion since 1990.
For 2018, the IMF raised its estimate to 6.5 percent from the 6.4 percent forecast in its July World Economic Outlook.
In raising the growth targets, the fund said it expects authorities to maintain a high level of investment-fueled growth “to meet their target of doubling real GDP between 2010 and 2020.”
The uptick in growth will result in greater debt levels over the long term, the IMF said, raising the prospect of a “sharp growth slowdown in China.”
The fund urged authorities to intensify efforts to rein in the expansion of credit.
Its latest World Economic Outlook predicts strengthening economic growth globally, building on healthy data from the first half of 2017.
China’s booming economy continues to propel Asia and drive worldwide economic growth. But despite the rosier near-term outlook, the fund is concerned about growing debt in the country.
China’s slower transition from an investment-based economy to a consumption-based one, the report said, “comes at the cost of further large increases in debt.”
The pace of China’s credit growth has alarmed analysts in recent years.
Since the global financial crisis in 2008 its debt load as a percentage of gross domestic product has grown more than 10 percent per year on average, according to IMF estimates, which assessed the ratio had ballooned to 234 percent of GDP by 2016.
Analysts will look for signals about China’s future economic and financial policies during the Party’s congress, which starts on October 18.
The government will publish third-quarter growth data on October 19.
Elsewhere in Asia, the fund raised Japan’s growth forecast to 1.5 percent this year from 1 percent last year.
But it was less optimistic on the country’s long-term prospects, citing the shrinking Japanese labor force.
In India, the “growth momentum slowed” due to the impact of a currency exchange initiative and the launch of a nationwide goods and services tax. The IMF lowered India’s forecast growth to 6.7 percent from the 7.2 percent predicted in July.
Strong global demand has also been a boon for the rest of Asia, where the fund forecasts sustained growth.
“In the rest of emerging market and developing Asia,” the fund wrote, “growth is expected to be vigorous.”
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
