IMF raises China growth forecast

By Wang Yanlin | April 28, 2014, Monday |

Online Edition

The International Monetary Fund today raised its China economic growth forecast to 7.5 percent for this year and 7.3 percent for 2015, both 0.3 percentage points up from its previous forecast in October.

Despite the upward adjustment, China's slowdown was "sharper than envisaged" and the country's financial sector remained vulnerable, according to IMF's latest report, Regional Economic Outlook: Asia and Pacific.

"A sharper than envisaged slowdown in China — due to financial sector vulnerabilities and the temporary cost of reforms along the transition toward a more sustainable growth path — would have significant adverse regional spillovers," the report said.

China's gross domestic product expanded 7.4 percent from a year earlier in the first quarter, the slowest in 18 months and compared with a 7.6 percent pace in the fourth quarter of last year.

However, there have been signs of improvement in recent months. Industrial profit increased 10.1 percent in the first three months, better than the rate of 9.4 percent in the January-February period, according to the National Bureau of Statistics yesterday.

Also, China's manufacturing activity may have rebounded this month. The HSBC Flash China Manufacturing Purchasing Managers' Index returned to a two-month high of 48.3 this month, higher than March's final reading of 48. A reading below 50 indicates a contraction.

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IMF raises China growth forecast

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