The IMF yesterday maintained its growth target for China at above 8 percent for this year and next, despite a slowdown in the world’s second-largest economy.
“In China, even with the drag from external demand, growth is projected to be above 8 percent in 2012 and 2013 because consumption and investment are expected to remain robust,” the fund said in its global economic forecast.
It said the economy was expected to grow 8.2 percent this year — above the Chinese government’s target of 7.5 percent — and 8.8 percent next year, echoing predictions made in January.
However the IMF warned that the nation’s slowing real-estate sector and a weak export market would continue to pressure growth.
“These appear manageable on their own, but a large external shock could bring these risks to the fore, precipitating a decline in investment and activity in China that would have implications for its trading partners,” it said, adding that monetary easing would remain limited as China is “still working through its previous credit expansion.”
The IMF said Japan’s disaster-hit economy would expand 2 percent this year, higher than its earlier 1.7 percent projection, amid a surge in reconstruction spending, but it could be tempered by energy shortages and Europe’s debt woes.
However, growth is expected to be “subdued” at 1.75 percent next year, “reflecting the weak global environment and a decline in reconstruction spending,” it said.
The eurozone recession this year would be milder than forecast, the IMF said, raising its outlook for a recovery next year, but warning of new risks, notably over Spain.
The IMF said that the recession would slice 0.3 percent from eurozone output this year, instead of the 0.5 percent forecast in January, and that growth would be 0.9 percent next year, up from 0.8 percent.
That makes a rebound of 1.2 percentage points.
Meanwhile, the IMF issued a clarion call to bickering US politicians yesterday, urging them to solve the country’s debt problems before a still-vulnerable economy is tipped over the brink.
The IMF raised US growth projections for this year to 2.1 percent, which was up 0.3 percentage points from a January estimate.