IMF trims forecast for China’s GDP growth, raises outlook for US
Mainland GDP targets lowered to 6.8 per cent and 6.3 per cent for next two years, with falling property prices and ageing population to blame
The International Monetary Fund has cut its forecasts for China's economic growth for this year and next as the global economic rebound plateaus, despite a sharp drop in oil prices.
The fund expects China's gross domestic product growth to slow to 6.8 per cent and 6.3 per cent - estimates revealed in the update to its World Economic Outlook published three months ago.
Back then, it expected economic growth of 7.1 per cent and 6.8 per cent for the two years, respectively.
But Gian Maria Milesi-Ferretti, a deputy director of research at the IMF, said slower growth and lower prices provided a positive backdrop for much-needed structural reform to rebalance the world's second-biggest economy.
"The decline in oil prices is a positive for China. China needs to rely less on stimulus, which is good for rebalancing. It is going to provide a boost to the Chinese economy in the next few years," Milesi-Ferretti said.
Beijing has repeatedly stated its intention to shift the economic mix of the country towards domestic consumption and services from the investment-heavy and export-oriented manufacturing formula that has driven massive growth for the past 30 years.