WASHINGTON: China’s economy is projected to grow by 8.1% this year, built on its effective pandemic containment measures and policy support, the International Monetary Fund said in its World Economic Outlook (WEO) update.
It estimated China’s gross domestic product for 2020 to increase by 2.3%, matching the growth rate that was announced by China’s National Bureau of Statistics last week.
“China has been very successful in containing the pandemic and that has played a very important role to bring back activity much more quickly, ” Gita Gopinath, the economic counselor and director of IMF’s Research Department, said at a virtual news conference on Tuesday.
She added that there has been effective policy support provided both in terms of fiscal policy and monetary policy, and China’s exports have expanded in this environment.
In a blog posted on Tuesday, Gopinath noted that China returned to its pre-pandemic projected level in the fourth quarter of 2020, “ahead of all large economies”.
Official statistics have shown China’s growth steadily picked up throughout the year. The country registered a fourth quarter GDP expansion of 6.5%t, a sharp contrast with a 6.8% slump in the first quarter and up from 4.9% growth in the third quarter year-on-year.
Malhar Nabar, a division chief at the IMF’s Research Department, also said China’s policy support contributed to its rebound.
“The public infrastructure spending support, and also the support that was extended to affected households and to firms, reinforced by aggressive actions by the People’s Bank of China to provide liquidity support and ensure that credit provision remains strong, ” Nabar said at the briefing.
The 8.1% growth rate for 2021 was 0.1 percentage point down from the IMF’s October forecast, but higher than the 7.9% projection the World Bank made on Jan 5.
The World Bank, in its 2021 Global Economic Prospects, said its revised-up prediction for China reflected the release of “pent-up demand and a quicker-than-expected resumption of production and exports”.
Globally, the stronger-than-expected recovery in the past six months, the policy support since the end of last year, plus the vaccination efforts, have enabled the IMF to upgrade its forecasts, believing the world could achieve 5.5% growth in 2021 after a record contraction of 3.5% in 2020.
The estimate for 2020 is 0.9 percentage point higher than projected in the October WEO forecast, while the 2021 growth forecast is up by 0.3 percentage point, according to the quarterly update. — China Daily/ANN