The International Monetary Fund (IMF) predicts that economic growth in the Asia-Pacific region will accelerate from 3.8% last year to 4.6% this year, an increase of 0.3 percentage point from last October's forecast. The IMF believes that China's economic rebound will power the region and contribute one-third of global growth this year.
The head of the IMF Asia-Pacific pointed out that China's monetary and fiscal policies have room to provide support for recovery, but they still face some long-term challenges, especially in the real estate industry. The IMF also mentioned that due to changes in China's population structure, the growth rate will slow down in the future, and it is appropriate to implement structural reforms to promote long-term growth.
The IMF pointed out in its latest "Regional Economic Outlook" released in May that the Asia-Pacific region will contribute nearly 70% of global growth this year, which is much higher than in recent years. The most important change is China's reopening. A surge in consumption from China is driving growth, accounting for an estimated 34.9 percent of global growth, despite weak demand elsewhere.
At the same time, the IMF predicts that China's economy will grow by 5.2% this year, a sharp increase of 0.8 percentage points from last October's forecast.
Krishna Srinivasan, director of the IMF's Asia and Pacific Department, said that China's inflation is very low and there is fiscal space to maintain monetary and fiscal policy support to accelerate economic recovery.
Thomas Helbling, deputy director of the Asia-Pacific Department, mentioned that the real estate industry is a long-term challenge for China. The region is also lacklustre, pending a return of buyer confidence. We should be more active in assisting weaker real estate companies to restructure and launch more measures to support the industry. He mentioned that due to the downturn in the real estate industry, the pressure on local finances has increased, and the situation needs to be closely observed.
