The International Monetary Fund (IMF) has raised its growth forecast for China this year to 5.4% despite highlighting continued risks in the country’s real estate sector.
The IMF said that it still expects growth in China to slow to 4.6% in 2024 due to continuing weakness in the property market and soft demand.
Real estate accounts for more than a quarter of China’s economy, and the sector has been faltering lately under heavy debt obligations and after years of overbuilding.
The IMF had previously lowered its growth forecast for China to 5% this year and 4.2% in 2024. The upward revision is due largely to expectations that China will benefit from strong commodity prices moving forward.
China recently reported third-quarter GDP growth of 4.9%, beating expectations and bolstering government forecasts for full-year growth of 5%.
Policymakers in the nation of 1.4 billion people announced several measures in the last few weeks to support the struggling real estate sector and local governments.
The government in Beijing also made the atypical decision to increase the country’s budget deficit as it navigates an economic slowdown.
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