The Chinese economy is expected to grow 8.4% in 2021, the International Monetary Fund (IMF) announced on Tuesday.
The figure is 0.3 percentage point higher than the IMF’s January forecast and would mark the country’s highest growth rate since 2011, according to the latest World Economic Outlook (WEO) released at the start of the spring meetings. from the IMF and the World Bank.
The report notes that “effective containment measures, a strong public investment response and central bank liquidity support facilitated a strong recovery.”
China was the only major economy to grow in 2020, posting an annual GDP growth of 2.3%.
“Among emerging markets and developing economies, China had already returned to pre-COVID GDP in 2020, while many others are not expected to do so until 2023,” the IMF said, noting that its forecast for China are much higher than the others. major economies, including the United States, Germany and France, although behind India.
The world’s second-largest economy has set its GDP growth rate at over 6% for 2021 as its economic recovery gathers pace.
Japanese brokerage and investment bank Nomura Orient International Securities analyzed that “China might not want to be seen as ‘mark-to-market’ when setting the growth target, and it might not not wanting to reduce the growth target next year when the base effect is likely to weaken. “
According to the IMF, China’s economic growth is expected to slow to 5.6% next year. Pre-COVID-19 risk factors remain relevant, for example, “tensions between the United States and China remain high on many fronts, including international trade, intellectual property and cybersecurity,” he said. -he declares.
The global economy is expected to grow by 6% in 2021, a rate unprecedented since the 1970s, thanks to unprecedented policy responses to the COVID-19 pandemic.
However, the IMF saw the possibility of financial risk, as rising interest rates can have negative effects on vulnerable emerging and developing economies. Although global economies are waiting to see the impact of the US stimulus package, Michael R. Powers, professor in the Department of Finance at Tsinghua University’s School of Economics and Management, warned that governments should be transparent. and cautious about economic stocks to keep another banging tantrum or the overheating economy.
Powers also said concerns about rising debt and other massive support from governments around the world, particularly in the United States, were “natural”, but argued that such support was expected in case of economic crisis. While there were still doubts about the outcome, Powers said future economic growth would justify the investment, and he was as bullish as the IMF and others in their forecasts.
Regarding the recent collapse of Archegos and voices assuming it is a sign of alarmingly high leverage – or even a financial crisis that starts every 10 years – Powers suggested waiting and see how the situation evolves. “So far, this appears to be just one unfortunate case … from a broader perspective, it will have minimal impact on the economy.”
(CGTN’s Guan Xin, Su Xinbo also contributed to the story)