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Updated January 29th, 2022 at 09:34 IST

IMF's Gita Gopinath warns China’s growth 'losing steam', foresees 4.8% growth in 2022

According to data collected by the IMF, China’s recovery is ‘well advanced’ but the recurrent COVID-19 outbreaks have slowed down the country GDP.

Reported by: Vishnu V V
Gita Gopinath
Image: AP/Facebook-Gita Gopinath | Image:self
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The International Monetary Fund (IMF) continues to raise concern against China's monetary situation as it has now suggested that the country’s growth might be slowing down. Only a day after the IMF raised a warning against China’s COVID-19 lockdown policies, First Deputy Managing Director of the International Monetary Fund Gita Gopinath has now said that China’s growth is ‘losing steam’. Citing the IMF’s research, Gopinath pointed out that the country is suffering from its weaker consumption patterns. 

Speaking about the economic situation of the country, IMF official Gita Gopinath said that the IMF foresee 4.8 per cent growth by China in 2022. “China’s growth is losing steam with a stop-and-go pattern, reflecting COVID lockdowns, weakness in the real estate sector, and weaker-than-expected consumption. We foresee 4.8% in 2022,” the monetary expert tweeted while sharing details of the country’s GDP growth.

“In China, people traditionally keep high savings out of concern that social safety nets can’t support them in case of a setback. Boosting social protections to offer more security will promote private spending,” the First Deputy Managing Director of IMF added. Gopinath further tweeted that the greener growth side of the country’s recovery. “Rebalancing toward more consumption-based growth will boost growth itself and shift activity away from carbon-intensive industrial sectors to services industries, helping China meet its climate goals,” the tweet read.  

Chinese economy lacks balance and momentum: IMF

According to data collected by the IMF, it informed that China’s recovery is ‘well advanced’. Speaking about the country growth pattern, the IMF noted that despite a successful vaccination campaign, recurrent COVID-19 outbreaks have slowed down the country GDP. “It lacks balance and momentum has slowed, reflecting the rapid withdrawal of fiscal support, lagging consumption amid recurrent COVID-19 outbreaks, and slowing real estate investment following policy efforts to reduce leverage in the property sector,” a report by the IMF read.

“Regulatory measures targeting the technology sector, intended to enhance competition, consumer privacy, and data governance, have increased policy uncertainty. China’s climate strategy has begun to take shape with the release of detailed action plans. Productivity growth is declining as decoupling pressures are increasing, while a stalling of key structural reforms and rebalancing are delaying the transition to “high-quality”—balanced, inclusive and green—growth,” it further noted.

IMF Chief warns China on repercussions of lockdowns

On Friday, the IMF raised a warning against China's zero-COVID approach, saying that the hardline policy risks damaging the global economy. Calling for an immediate reassessment of its stringent lockdowns to curb the spread of the highly-transmissible new COVID-19 strain, Omicron, IMF chief Kristalina Georgieva slammed Beijing's "hardline" strategy, saying it only contained the pandemic in China for "some time." Speaking at the World Economic Forum (WEF) on a virtual panel, Georgieva stated that what was supposed to be beneficial is now proving to be a budget on China's economy and globally.

"China is still using a zero-COVID policy. But what COVID is teaching all of us is that a highly transmissible variant may be much more difficult to contain without a dramatic impact on the economy,” said Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), as quoted by The Guardian.

Image: AP

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Published January 29th, 2022 at 09:34 IST

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