The IMF raised its forecast for China's economic growth this year by 0.4 percentage points to 5 percent

The International Monetary Fund said Wednesday that China's economy is expected to grow 5 percent this year after a strong first quarter, up 0.4 percentage points from its previous forecast of 4.6 percent growth, but expects slower growth in coming years.

According to Reuters, Bloomberg and Agence France-Presse, the IMF said in a press release on Wednesday (May 29) that it had raised its gross domestic product (GDP) targets for China by 0.4 percentage points in both 2024 and 2025, but warned that China's economic growth would slow to 3.3 percent by 2029 due to an aging population and slower productivity expansion.

China's economic growth remains resilient, with growth forecast at 5% in 2024 and slowing to 4.5% in 2025, the IMF said, adding that the upward revision was due to strong first-quarter GDP growth and recent policy measures taken by the authorities.

China is targeting economic growth of around 5 per cent this year. China's GDP grew 5.3 per cent in the first quarter from a year earlier, beating expectations, but the property slump continued to weigh on domestic demand. The property market accounts for a quarter of China's GDP.

Gita Gopinath, the IMF's first deputy managing director, said in an interview with Bloomberg earlier this week: "We do see a recovery in consumption (in China), but there is still a long way to go... Private investment remains weak, mainly because of weakness in the housing sector."

The Chinese government last Friday (May 17) introduced a number of measures to help the housing market, including removing the floor of mortgage interest rates and lowering the minimum down payment ratio.

Gopinath said in an IMF news release Wednesday that the top priority should be to "mobilize central government resources to protect buyers of pre-sold homes and expedite the completion of pre-sold homes to pave the way for resolving the problem of bankrupt developers."