IMF: China's economy will continue to decelerate until 2028
The International Monetary Fund (IMF) predicts that China's economy will continue to decelerate in the coming years, as it struggles with falling productivity and a rapidly aging population.
According to a report released on February 2 by the IMF, the world's second largest economy saw its slowest growth in decades last year, when the debt crisis in the real estate sector, tensions Geopolitics and world demand weaken. The report forecasts that by 2028, China's growth will slow to 3.5% as the country faces challenges from weak productivity and an aging population, while risks to the outlook is very high. Previously, the IMF forecast that China's economic growth would reach 4.6% this year
Evergrande has become a symbol of the difficulties of the real estate industry, with huge debt of more than 300 billion USD. This week, a court in Hong Kong (China) allowed the liquidation of Evergrande's foreign assets to begin, although the company insisted this would not affect its domestic operations.
The IMF report warns that the downward trend in China's real estate market may continue to increase the burden on private demand and reduce confidence. Ms. Sonali Jain-Chandra, Head of China Mission at the IMF's Asia and Pacific Division, said the real estate sector is in the midst of a multi-year transition to a smaller and more sustainable scale. However, she believes more needs to be done to support this struggling sector.
According to official data, China's economy grew 5.2% last year, exceeding the previously set target of 5%. Exports - which are the main growth driver - fell for the first time in seven years, due to tensions with Western countries and weakening global demand. It is expected that Chinese officials will announce growth targets for 2024 next March.
