IMF slashes growth forecast for China

IMF slashes growth forecast for China

BEIJING - Agence France-Presse
IMF slashes growth forecast for China

As evidence mounts that China’s economy is losing momentum, economists are fast abandoning their rosy recovery forecasts. REUTERS photo

The International Monetary Fund yesterday cut its growth forecast for China in 2013 to “around 7.75 percent,” down from its earlier forecast of 8.0 percent, citing a sluggish global recovery which hurt exports.

“The Chinese economy is expected to grow at around 7.75% this year and at about the same pace next year,” David Lipton, IMF first deputy managing director, told reporters in Beijing.

China is the world’s second-largest economy and seen as a potential driver of global recovery in the face of the eurozone’s ongoing debt crisis and unsteady growth elsewhere.

The IMF’s World Economic Outlook report released last month had forecast Chinese growth of 8.0 percent this year and 8.2 percent for 2014 -- both of those predictions themselves reductions from previous ones made in January.

China’s economy grew 7.8 percent in 2012 -- its slowest pace in 13 years -- and registered a surprisingly weak 7.7 percent expansion in the first three months of this year, well below forecasts. Lipton said weakness in the global economy was a factor in slowing Chinese export growth.The lowered gross domestic product forecast “comes essentially from looking at the global economy and the pace of growth in the global economy and the demand that derives from that growth for Chinese exports”, he said.