IMF likely overestimating China’s economic growth prospects, US analyst says
- Questionable data supplied by Beijing to the International Monetary Fund leads to an inaccurate and inflated projection, according to research group founder
- Growth above 3 per cent is unlikely for China ‘into the medium term and beyond’
China’s economic growth this year might be only half of what the International Monetary Fund is predicting, owing to a huge shake-out in the country’s property sector, weak foreign direct investment and other structural problems, according to the founder of a US-based think tank that studies China.
While the country is “getting to the bottom of the property cycle” and will be stronger “a year from now”, the central government’s need to bail out struggling subnational governments and growing constraints on Chinese exports means economic growth could be as low as 2 per cent this year, Daniel Rosen of the Rhodium Group said on Wednesday.
Rosen said growth above 3 per cent was unlikely for China “into the medium term and beyond”.
03:18
China Evergrande suspends market trading amid questions about chairman’s whereabouts
Because the IMF is required to use data provided by Beijing for its projections, “their hands are somewhat tied, and they’re not allowed to go off and kind of pick their own and alternative data with which to offer a corrective,” he said in a discussion that highlighted updates to Rhodium Group and the Atlantic Council’s Pathfinder database.