China is expected to make a considerable contribution to the world economy this year, with approximately one-third of global growth.
According to the Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva , the analysis conducted by the international financial agency indicates that an increase of one percentage point in China’s GDP growth results in an average GDP growth of 0.3 percentage points in other Asian economies, which she views as a positive development.
During her appearance at the 2023 China Development Forum in Beijing, she stated that the organization’s January forecast predicts a substantial increase in GDP growth to 5.2 percent this year, which is more than 2 percentage points higher than the 2022 rate.
It is worth noting that China’s social and economic development plan has set a target of achieving over 5% GDP growth this year.
The robust rebound means China is set to account for around one third of global growth in 2023, giving a welcome lift to the world economy.
Managing Director of IMF – Kristalina Georgieva
The expected rebound of private consumption, as the economy reopens and activity normalizes, is driving the growth.
Despite this, IMF warned that 2023 will be another challenging year, with global growth slowing to below 3 percent due to scarring from the pandemic, the war in Ukraine, and monetary tightening.
Furthermore, even with a better outlook for 2024, global growth will remain below its historic average of 3.8 percent. Therefore, IMF will continue to closely monitor developments and assess potential implications for the global economic outlook and global financial stability.
In particular, the most vulnerable countries, such as low-income countries with high levels of debt, will be closely watched.
In contrast, some experts, such as Chen Fengying, have more optimistic views on China’s economic growth. Despite China’s GDP growth rate of 3% in 2022 due to multiple COVID-19 outbreaks and a turbulent global landscape, Chen has predicted a growth rate of 6% for 2023.
However, Beijing has not included this ambitious goal in its plan, as last year’s growth rate was below the official forecast of 5.5%. Nonetheless, with a solid recovery, the IMF believes China can maintain positive momentum and continue on the growth path towards convergence with advanced economies through comprehensive policies.
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