IMF lowers China's 2015 growth to 7pc

The International Monetary Fund cut its economic growth forecast for China to about 7 per cent for next year, but urged the authorities to avoid further stimulus measures and concentrate on curtailing financial risks instead.

In remarks that projected confidence about the health of the world's second-biggest economy, the IMF said Beijing must keep its word on implementing reforms that would correct imbalances, including a "moderately undervalued" yuan.

Specifically, it said conditions were right for China to take the next step in freeing its interest rates market, challenging the view among some senior Chinese officials that the country is not yet ready for such a move.

"We are not counselling stimulus at this point," the IMF's first deputy managing director David Lipton told reporters, when asked if he thought the government should do more to shore up flagging economic growth. "We don't think there are sufficient signs that would warrant that."

Rather, he said the bigger threat to China was its persistent reliance on debt and investment in areas such as real estate to power its economy, weaknesses that are still growing today.

So unless the economy was at risk of missing the government's growth target of about 7.5 per cent this year by a substantial margin, Lipton said more stimulus was unwarranted.