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China's Economic Rebound in 2023 Acknowledged by IMF in Annual Review

China’s Economic Rebound in 2023 Acknowledged by IMF in Annual Review

Beijing, March 03, 2024, The Europe Today: In a formal statement released following the conclusion of its annual Article IV review, the executive board of the International Monetary Fund (IMF) has highlighted China’s significant economic rebound in 2023. The report indicates that the nation’s real GDP is estimated to have grown in line with the targeted rate of approximately 5 percent, showcasing a robust recovery following the challenges posed by the COVID-19 pandemic.

The IMF emphasized that the revival of China’s economic activity was propelled primarily by domestic demand, with a notable contribution from private consumption. The country’s macroeconomic policies played a pivotal role in supporting this resurgence. These policies included the further relaxation of monetary measures, tax relief initiatives for both firms and households, and strategic fiscal spending directed towards disaster relief efforts.

According to the statement, inflation in 2023 experienced a decline, largely attributed to reduced energy and food prices. However, the IMF anticipates a gradual increase in inflation to 1.3 percent in 2024. This projection is based on the narrowing output gap and the diminishing base effects of commodity prices.

The press release also noted that decisive policy actions, especially in the form of accelerated restructuring within the property sector, have the potential to further boost confidence and potentially lead to a more robust-than-expected rebound in private investment.

The IMF’s assessment was the result of a comprehensive consultation carried out by an IMF team during their visit to China from October 26 to November 7, 2023. During this period, the team engaged in constructive discussions with senior officials from the government, the People’s Bank of China, private sector representatives, and academics. The aim was to exchange perspectives on China’s economic prospects, identify potential risks, assess reform progress and challenges, and deliberate on appropriate policy responses.

The acknowledgment of China’s economic resilience and the positive outlook presented by the IMF underscores the effectiveness of the nation’s targeted policies in navigating post-pandemic challenges and fostering sustainable growth.