THE INTERNATIONAL MONETARY FUND has trimmed its forecasts for China’s growth this year and next.
It is now projecting 8.1% growth this year and 5.6% growth in 2022. That is one- and two-tenths of a percentage point, respectively, lower than in its previous forecasts published last October.
Its latest projections are contained in its newly published update to its World Economic Outlook. Its forecast for the global economy is for 5.5% growth this year and 4.2% in 2022, after a 3.5% contraction in 2020.
The Fund notes that China’s strong recovery in 2020 reflects ‘effective containment measures, a forceful public investment response and central bank liquidity support’. This Bystander expects all three to carry into this year.
The Fund also says
Surging infections in late 2020 (including from new variants of the virus), renewed lockdowns, logistical problems with vaccine distribution, and uncertainty about take-up are important counterpoints to the favorable news. Much remains to be done on the health and economic policy fronts to limit persistent damage from the severe contraction of 2020 and ensure a sustained recovery.
Though written in the context fo the global economy, it applies to China, too.