IMF raises China's economic growth forecast

The International Monetary Fund (IMF) in its updated report on Monday World Economic Outlook has raised China's economic growth forecast to 5.0 percent in 2025 and 4.5 percent in 2026.The IMF said this improvement in the outlook reflects stronger economic activity supported by stimulus measures and additional investment financing from policy banks, which have helped sustain domestic demand and boost confidence despite external pressures.

According to the IMF, the global economy should remain relatively resilient despite trade disruptions and geopolitical uncertainty. The Fund estimates that global economic growth will reach around 3.3 percent in 2026, an increase of 0.2 percentage points from its October forecast. This revision was driven by the improved performance of major economies, including the United States and China.

The more favourable outlook for China is partly the result of improved export performance and supportive fiscal and credit policies. Chinese policymakers have also responded to IMF recommendations by strengthening macroeconomic support, including targeted fiscal measures, continued easy monetary policy and efforts to stimulate private investment and consumption. These measures are consistent with the IMF's emphasis on balancing external resilience and sustainable domestic growth.

In recent months, China has stepped up policy actions that closely align with IMF recommendations, placing greater emphasis on stabilising growth while managing longer-term risks. Measures to support domestic demand, infrastructure and high-quality investment, as well as maintaining easy macroeconomic conditions, play a key role in this approach. At the same time, policymakers have repeatedly underlined their commitment to structural reforms and financial stability.

Despite the positive revision of the IMF forecast, the IMF also points to persistent risks. According to the Fund, trade tensions, political uncertainty and possible financial vulnerabilities could negatively affect economic developments in the medium term.

CMG