IMF sees no "brutal slowdown" in China - Christine Lagarde

Peter Spence
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IMF managing director Christine Lagarde (Source: Getty)

China's economic expansion isn't set to stutter, according to the International Monetary Fund (IMF).

IMF managing director Christine Lagarde says that the fund sees "no brutal slowdown" and expects that China will achieve growth of seven to 7.5 per cent this year.

Investors now see a possible slowdown in Chinese growth as a key risk, as falling growth in one of the world's biggest economies could see international demand plummet.

Bank of America Merrill Lynch's fund manager survey for June saw that investors now perceive prospects of a Chinese debt default as the most significant risk on the horizon. 36 per cent of survey respondents voiced concerns about the possibility.

But rather than expecting such a drastic event, Lagarde says that the IMF is now "reassured", seeing merely a "slight slowing" of growth to a more sustainable level.

Speaking on Sunday, Lagarde said that the global recovery should accelerate in 2015, saying that "global activity is picking up, but the momentum could be less strong than we had expected" as a result of subdued investment and weaker than anticipated potential growth.

Lagarde also announced that the IMF's update of its global economic outlook will include revisions from the forecasts it made this April.

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