IMF cuts Chinese growth forecast

Suzie Neuwirth

THE INTERNATIONAL Monetary Fund has cut its outlook on Chinese economic growth to 7.75 per cent from 8 per cent, due to the world’s second largest economy’s continuing dependence on exports and a large gulf between rich and poor.

However, the IMF said it expects the pace of the economy to pick up moderately in the second half of the year, in line with a projected mild improvement in the global markets.

The new Chinese government has set about rebalancing the country’s economy since taking office in March.

“While China still has significant policy space and financial capacity to maintain stability even in the face of adverse shocks, the margins of safety are narrowing and a decisive impetus to reforms is needed to contain vulnerabilities and move the economy to a more sustainable growth path,” said the IMF.