IMF raises China’s 2025 GDP forecast by a hair, cites stimulus effects

The US also sees a bump in expected economic growth, and IMF says this could help keep global growth steady amid downward revisions elsewhere

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The International Monetary Fund expects that China’s stimulus measures will help offset the impact of a property market downturn on the nation’s economic growth in 2025. Photo: Reuters

Published: 10:00pm, 17 Jan 2025Updated: 11:51am, 18 Jan 2025

The International Monetary Fund (IMF) has raised China’s 2025 growth forecast to 4.6 per cent from an earlier projection of 4.5 per cent, as stimulus measures start percolating in the world’s second-largest economy.

“This revision reflects carryover from 2024 and the fiscal package announced in November largely offsetting the negative effect on investment from heightened trade policy uncertainty and property market drag,” the IMF said on Friday in its World Economic Outlook.

Global growth is projected at 3.3 per cent this year, unchanged from the IMF’s October forecast as an upwards revision in the United States offset downward revisions in other major economies.

For China, stimulus measures since September have included rate cuts, debt-relief efforts and a 10 trillion yuan (US$1.36 trillion) package to help reduce the financial pressures facing indebted local governments.

On Friday, China said it hit leadership’s 5 per cent growth target for the nation’s gross domestic product, three days ahead of US president-elect Donald Trump’s inauguration. During his election campaign, Trump pledged new tariffs against China of at least 60 per cent.

China’s economic direction this year hinges on the speed, strength and effectiveness of its fiscal-policy roll-out, as well as the pace of monetary easing, said Lynn Song, chief economist for Greater China at Dutch financial services corporation ING.