IMF cuts China's growth outlook on weak demand
Organisation trims forecast to 7.75pc and warns that current economic model has run its course
The International Monetary Fund has cut its forecast for China's economic growth this year, despite expectations that an expansion of credit and a mild recovery in the global economy will offer solid support to activity in the second half of this year.
IMF first deputy managing director David Lipton said in Beijing that the cut to 7.75 per cent from a previous forecast of 8 per cent was modest and reflected weak external demand rather than deteriorating internal conditions in the world's second biggest economy.
"China is still growing at a very fast rate," Lipton said, adding that 7.75 per cent was "quite rapid growth by any … standard".
China's 7.8 per cent annual growth last year was the weakest expansion in 13 years and set alarm bells ringing among international investors who have grown increasingly worried about its potential drag on global output and demand.
The rate of growth, however, remains by far the most robust of any of the world's major economies, despite being well below the 10 per cent average it had achieved over the past 30 years.