Jakarta, CNBC Indonesia – The International Monetary Fund (IMF) raised its forecast for China’s economic growth in 2023, Tuesday (7/11/2023). The increase in forecasts was driven by stronger consumption reasons and newly announced policies by Beijing.
The IMF said it saw gross domestic product (GDP) increasing 5.4% this year, compared with its previous forecast of 5.0%. Meanwhile they raised their projection for 2024 to 4.6% from 4.2%.
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IMF First Deputy Managing Director Gita Gopinath said the increase reflected “rebound strong”. Especially after the reopening of domestic demand, especially consumption.
“(The new estimates made) reflect stronger-than-expected growth in the third quarter and the new policy support recently announced,” Gopinath said at a press conference in Beijing, as quoted AFP.
However, the IMF still gives a warning. “Weakness in the property sector will continue and external demand will remain weak”
The economy grew 4.9% in July-September, slower than the previous quarter. However, it is much better than expected and slightly below the government’s target, which is around five percent for this year.
China’s economy grew only 3.0% last year, far below the official target of 5.5%. This is the result of being hampered by strict policies regarding handling Covid-19.
A series of below-par economic data in the first half led the government to announce a number of targeted stimulus measures to support key sectors. Especially the problematic property industry sector.
In October, Beijing said it would issue state bonds worth one trillion yuan or around IDR 2,148 trillion. This is to increase infrastructure spending.
China’s prime real estate sector generally accounts for about a quarter of GDP, but the industry has lurched from one crisis to another in recent years. As a result, large companies become crippled by piles of debt.
[Gambas:Video CNBC]
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