New Covid-19 variants prompt IMF to slash China, emerging Asia economic growth outlook

The International Monetary Fund (IMF) trimmed China’s GDP growth forecast for this year to 8.1 per cent, down from April’s projection of 8.4 per cent

Steady economic recovery is not assured so long as segments of the world’s population remain unvaccinated against the virus and its mutations, the IMF says

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The IMF has trimmed China’s gross domestic product growth estimate to 8.1 per cent this year. Photo: Reuters

Published: 9:00pm, 27 Jul 2021Updated: 11:21pm, 27 Jul 2021

The International Monetary Fund (IMF) on Tuesday cut its economic growth forecast for China this year because of the patchy recovery from new coronavirus variants, as Beijing focuses on reducing debt and public investment.

The Washington-based organisation trimmed China’s gross domestic product (GDP) growth estimate to 8.1 per cent, down from April’s projection of 8.4 per cent. But the country’s growth forecast for next year edged up 0.1 percentage points from April to 5.7 per cent.

The IMF also scaled back its forecast for emerging Asia and developing economies to 7.5 per cent this year from 8.6 per cent in April. By contrast, it upgraded its estimate for the United States to 7 per cent this year from 6.4 per cent in its previous forecast.

“Smooth and durable recoveries are not assured even in places where infections are seemingly under control,” the IMF said. “Economies are diverging even further, influenced by differences in the pace of vaccine roll-out and policy support.”

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The pace of global vaccinations stood at about 40 million doses a day at the end of June, with China alone accounting for more than 20 million daily jabs.