IMF ups China’s growth rate

Rate for 2017 raised slightly to 6.8%; global recovery looking up too

The International Monetary Fund has forecast China’s economy to grow at 6.8 percent in 2017 — up by 0.2 percentage point from its April projection — in its latest World Economic Outlook, which also paints a rosy picture for the global recovery.

“In China, growth is projected to notch up to 6.8 percent in 2017, and to slow to 6.5 percent in 2018,” the IMF said in its October report, due to be released on Tuesday in Washington.

“The upward revision to the 2017 forecast reflects the stronger-than-expected outturn in the first half of the year underpinned by previous policy easing and supply-side reforms.”

The report forecasts the US economy to expand at 2.2 percent in 2017 and 2.3 percent in 2018, a downward revision of 2.3 and 2.5 percent for 2017 and 2018, respectively, in IMF’s April report.

In the first half of 2017, China’s economy grew at 6.9 percent.

Beijing has targeted a gross domestic product growth of around 6.5 percent, or “higher if possible in practice” for 2017, Chinese Premier Li Keqiang said at the annual national legislative meeting in early March.

The GDP of the world’s second-largest economy reached 74.4 trillion yuan ($11.23 trillion) last year, representing 6.7 percent growth, and seeing China outpace most other economies.

The IMF’s report said that for China’s growth in 2018, the upward revision of 0.3 percentage point mainly reflects an expectation that the authorities will maintain a “sufficiently expansionary policy mix”, especially through high public investment, to meet their target of doubling real GDP between 2010 and 2020.

Inflation in China is expected to “remain tame” at 1.8 percent in 2017, reflecting weakening food prices in recent months, and to pick up gradually to 2.6 percent over the medium term, according to the report.

For the emerging market and developing economies, excluding Argentina and Venezuela, inflation is projected to remain roughly stable in 2017 and 2018 — at 4.2 percent and 4.4 percent, respectively.

“Only a year and a half ago, the world economy faced stalling growth and financial market turbulence,” Maurice Obstfeld, IMF economic counsellor and director of research, said in the foreword of the latest World Economic Outlook, which gives a view of where the world’s economy is leading.

“The picture now is very different, with accelerating growth in Europe, Japan, China, and the United States,” Obstfeld said.

Global growth, which in 2016 was the weakest since the global financial crisis at 3.2 percent, is projected to rise to 3.6 percent in 2017 and to 3.7 percent in 2018 — 0.1 percentage point higher in both years than in the April and July forecasts, according to the latest IMF report.

Supporting the recovery are “notable pickups” in investment, trade, and industrial production, coupled with strengthening business and consumer confidence, it said.

However, it warns that the recovery is not complete, saying that “although the baseline outlook is better, growth remains weak in many countries.”

“The outlook for advanced economies has improved, but in many countries inflation remains weak, indicating that slack has yet to be eliminated, and prospects for growth in GDP per capita are held back by weak productivity growth and rising old-age dependency ratios,” the report noted.

The IMF and World Bank are convening their annual meetings in Washington for a series of events on Tuesday through Sunday.