IMF ups China’s 2024 GDP forecast, urges focus on market-oriented reforms at July’s third plenum

International Monetary Fund points to strong first-quarter numbers and property sector moves as revised economic-growth estimate is brought in line with China’s target

But ‘good reforms’ are still needed, and priorities are said to include making China’s economy more consumption-facing and capable of supporting greater job growth

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An IMF panel holds a press briefing concluding the 2024 China Article IV Mission in Beijing on Wednesday. Photo: AFP

Published: 3:19pm, 29 May 2024Updated: 9:11am, 30 May 2024

China’s leaders should strive to ensure that economic growth is more demand driven, according to officials from the International Monetary Fund, as they also emphasised the need for Beijing to underscore market-oriented reforms at a highly anticipated political gathering in July that will set the tone for the country’s development trajectory in the next decade.

At a press conference in Beijing on Wednesday, the IMF revised its projection for China’s growth this year to 5 per cent – a 0.4 percentage point increase from the projection in April, bringing the financial agency’s estimate in line with the full-year target set by Chinese authorities in March.

In justifying its revision, the IMF pointed to strong economic data in the first quarter and property stimulus measures that Beijing recently announced.

“Risks are tilted to the downside, including from a greater- or longer-than-expected property sector adjustment and increasing fragmentation pressures,” Gita Gopinath, the IMF’s first deputy managing director, said after meeting in the past week with finance officials in the Chinese government – including People’s Bank of China governor Pan Gongsheng.

China’s GDP grew 5.3 per cent in the first quarter of 2024, outpacing most economists’ expectations. Two weeks ago, Beijing announced a slew of measures to rescue its staggering property sector, including 300 billion yuan (US$41.4 billion) worth of funding to help clear excess housing inventory.