International Monetary Fund Managing Director Christine Lagarde attends a news conference ahead of the inauguration of the World Economic Forum in Davos, Switzerland on Jan 21, 2019. [Photo/VCG]
The International Monetary Fund maintained its China economic growth forecasts while trimming global growth projections for 2019 at the World Economic Forum in Davos, Switzerland on Monday.
China’s economic growth is projected to be 6.2 percent for 2019, the same as the IMF’s previous prediction in October. Domestic demand is also estimated to remain robust, aided by policies to boost consumption this year, the IMF said in its Global Economic Prospects.
Figures show growth in China remains robust, in part reflecting resilient consumption. However industrial production and new export orders have moderated, asset prices have experienced downward pressure and sovereign bond spreads have risen amid trade tensions. Prices of newly constructed residential buildings have rebounded, including in first-tier cities following a period of correction according to the report.
The Fund projects a 3.5 percent growth rate worldwide for 2019 and 3.6 percent for 2020, down 0.2 and 0.1 percentage points compared to its forecasts in October, said IMF Chief Economist Gita Gopinath at an Update of the World Economic Outlook press conference.
The world economy is growing more slowly than expected, risks are rising and the expansion seen in recent years is losing momentum, said IMF Managing Director Christine Lagarde at the forum, calling for policymakers to collaborate to address global risks.
Wang Huiyao, founder and president of the Center for China and Globalization, poses for a photo on the sidelines of the World Economic Forum in Davos, Switzerland on Jan 22, 2019. [Photo provided to chinadaily.com.cn]
The reason for the gloomy forecast is the US-triggered trade tension between China and the US, which could dampen confidence in investment and economic development, said Wang Huiyao. Wang is a counselor of the State Council, China’s Cabinet, and founder and president of the Center for China and Globalization, the Beijing-headquartered non-governmental think tank.
China is one of the world’s largest economic engines and the leader of the global value chain, so if the tension hurts both countries’ economies it would definitely harm world economic forecasts, Wang said.
China should continue its reform and opening-up and continue to support the world economy, Wang added.
China’s support for the World Trade Organization and free trade is a counterbalance to the loss of momentum for the world economy, said Daryl Guppy, international financial technical analysis expert and special consultant to Axicorp.
The IMF forecast does not adequately assess the contribution of the Belt and Road Initiative to economic growth - not just in developed economies, but in emerging economies as well. In 2008 the world relied on China to lead the way and 2019 will be no different, Guppy said.
China’s year-on-year GDP growth reached 6.6 percent in 2018, achieving its goal of around 6.5 percent GDP growth set for the year, the National Bureau of Statistics said on Monday.
With the magnitude and size of the GDP at present, this kind of rate is already very impressive, so it is extremely important for China to maintain its above six percent GDP growth with continuous reform and opening-up and trade with more countries at a fast pace, Wang said.
From China Daily 2019-1-22