Forecast says China on course to reach growth target for the year

THE INTERNATIONAL Monetary Fund (IMF) hiked its expectation for Chinese growth in 2014 yesterday, indicating that the country will reach its target for a 7.5 per cent expansion.

The forecast was increased by 0.3 percentage points from the previous estimate in October, despite poor indicators for the manufacturing sector during the first quarter of the year. The Chinese government is targeting 7.5 per cent growth.

The IMF also used its Asia Pacific update to voice fears that Abenomics, the Japanese economic policy of monetary and fiscal easing, may struggle on the issue of structural reforms.

Thailand’s growth forecast was cut far more by the IMF than any other country in the region: growth is expected to be only 2.5 per cent this year, down from the 5.3 per cent previously projected.

Meanwhile, a senior IMF official said the European Central Bank should do “everything it can” to tackle low growth and inflation but governments must also shape up their economies.

Jose Vinals, director of the IMF's monetary and capital markets department, said a multi-pronged policy approach was needed to buoy the 18-country Eurozone.