THE International Monetary Fund (IMF) updated this Wednesday (10) the economic growth forecasts for the Chinafrom 4.8% to 5% this year and from 4.2% to 4.5% in 2026, citing the increase in Chinese exports, which reached the record amount of 1,000 billion dollars this week. The fund, however, underlines the need for Beijing to correct “economic imbalances“.
According to the Managing Director of the IMF, Kristalina Georgievathe Chinese government must correct problems such as inflation, which led to the devaluation of the yuan.
“Low inflation relative to trading partners led to a significant depreciation of the real exchange rate, which made Chinese exports cheaper,” said Georgieva, during a visit to Beijing.
According to her, this would have prolonged the “excessive dependencethe Chinese economy in relation to exports and caused external imbalances.
According to the IMF, exports are expected to account for around 20% of China’s economic growth in 2025.
The Fund also highlights that the Asian country’s economy is expected to contribute around 30% to the growth of the global economy.
“China is simply too big to generate significant growth from exports, and continuing to rely on export-led growth risks escalating global trade tensions.“, underlined Georgieva.
The director general’s analysis echoes concerns from other countries about an “influx” of Chinese products into domestic markets following Beijing’s decline in trade with the United States, amid a tariff war triggered by the American president. Donald Trump.
THE Chamber of Commerce of the European Union (EU)noted in a report that the yuan has depreciated to a 10-year low against the euro, although Chinese trade revenues are expected to support the local currency.
The devaluation of the yuan makes Chinese products more competitive compared to those valued in other currencies.
In her comments, Kristalina Georgieva also called on the Chinese government to take appropriate macroeconomic measures to resolve the housing crisis and improve the quality of the country’s social protection.
According to her, expanding social spending and accelerating the reform of China’s domestic passport system could increase consumption by up to 3 percentage points of gross domestic product (GDP).
To end the real estate crisis over the next three years, the country will need to invest around 5% of its GDP. This would help rebalance the economy and strengthen the national currency, the IMF said.
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