Business & Economy

Chinese economy to grow 1.9% this year, 8.2% in 2021: IMF

Beijing, Nov 5 (efe-epa).- The International Monetary Fund, or IMF, foresees the Chinese economy will deviate from the contraction trend COVID-19 has caused worldwide, with a growth of 1.9 percent this year and 8.2 percent in 2021.

These forecasts represent the latest update by the agency after a round of virtual consultations in which the head of mission for China, Helge Berger, and the IMF’s first deputy managing director, Geoffrey Okamoto. Both held meetings with the governor of the Chinese central bank and with the heads of the regulators of the securities market and of the banking and insurance sector.

Despite these positive prospects, Okamoto said growth remains “unbalanced” as relies excessively on government while private consumption “lags behind.”

Also, the deputy managing director recalled that the Chinese economy is still exposed to “growing financial vulnerabilities” and to an “increasingly complex foreign environment.”

The IMF expects core inflation – an indicator that excludes more volatile price products such as food or energy – to remain “off,” which will cause the consumer price index, the main indicator of retail inflation, to not exceed the limit of 3 percent Beijing set before the coronavirus crisis.

Okamoto called on the Chinese government to continue “modernizing” its monetary policies, to support the most vulnerable population groups and to strengthen regulatory frameworks in the financial system to reduce risks. It also called on deepening the reform of state-owned companies so that they do not have advantages over private companies and open domestic markets to foreign firms.

On the country’s role in the global COVID-19 crisis, the IMF director recalled that “China can help the international community to overcome many of the main challenges facing the global economy.”

As examples of this, he cited access to possible vaccines against the coronavirus, debt relief for poor countries, sustainable financing for global investment in infrastructure and the fight against climate change.

According to official data, China’s GDP grew by 4.9 percent year-on-year in the third quarter, which represented a return to positive figures in the accumulated figure of the year until September (+ 0.7 percent) after collapsing by 6.8 percent in the first quarter of 2020 and advancing 3.2 percent in the second. EFE-EPA


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