IMF raises China’s 2026 growth forecast to 4.5%, citing US ‘truce’ and stimulus roll-out

The fund predicts lower US tariffs and efforts to raise consumer spending may boost economy, though forecast short of last year’s growth

Reading Time:2 minutes

Kristalina Georgieva, the IMF’s managing director, delivers remarks at the IMF headquarters in Washington on April 17, 2025. Photo: EPA-EFE

Published: 6:00pm, 19 Jan 2026

The International Monetary Fund has raised its 2026 economic growth forecasts for both China and the United States by 0.3 percentage points, the latest sign that the pause in their trade war has eased pressure on both economies.

In its latest World Economic Outlook, the IMF’s flagship publication released on Monday, the Washington-based fund also upgraded its global economic growth estimate by 0.2 percentage points over its October forecast to 3.3 per cent this year.

China’s economy is now forecast to expand by 4.5 per cent in 2026, supported by lower US tariff rates and domestic stimulus measures. That projection, up 0.3 percentage points from the IMF’s October forecast, still remains below the 5 per cent growth rate in 2025 announced by Beijing’s National Bureau of Statistics earlier on Monday.

The IMF said the improved outlook reflects “lower US effective tariff rates on Chinese goods as a result of the year-long [US-China] trade truce agreed to in November and stimulus measures that are assumed to be implemented over two years”.

The fund also revised its projection for the US, estimating that the world’s largest economy would grow by 2.4 per cent in 2026 – an increase from its October forecast of 2.1 per cent – citing fiscal support, lower interest rates and the waning impact of higher trade barriers.

After several rounds of negotiations in 2025, Beijing and Washington reached an agreement in November that scaled back US President Donald Trump’s import tariffs, which had broken the 100 per cent mark in April. China agreed to ease export controls on rare earth metals, which are critical to hi-tech and automotive manufacturing.

On the stimulus front, Beijing has rolled out a series of measures since 2024. In December 2025, officials announced a package to boost household spending – long a weak spot in the economy – by expanding access to credit and encouraging new forms of consumption.

IMF raises China’s 2026 growth forecast to 4.5%, citing US ‘truce’ and stimulus roll-out

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The fund predicts lower US tariffs and efforts to raise consumer spending may boost economy, though forecast short of last year’s growth

The fund predicts lower US tariffs and efforts to raise consumer spending may boost economy, though forecast short of last year’s growth