The International Monetary Fund may have to trim its forecast for China’s economic growth as Covid-19 related restrictions and difficulties in the property sector weigh on prospects.
The Washington-based crisis lender sees Chinese gross domestic product expanding 3.2% this year and 4.4% in 2023.
“Risks are on the downside,” IMF Managing Director Kristalina Georgieva told reporters in Berlin Tuesday. “There is indeed the possibility that in this time of very high uncertainty, we might have to revise these projections down.”
Frustration with China’s Covid Zero policy is coming to a head, as lockdowns, testing and other restrictions spur historic protests across the country. Property developers have defaulted on a record amount of dollar bonds this year, but the nation’s mega state-owned banks are offering at least 270 billion yuan ($37 billion) in new credit to property developers as part of the country’s push to ease turmoil in the real estate market.
“China does have fiscal space to boost its economy and counter any pressure for the growth to go down,” Georgieva said. “We have been supportive in looking into what China can do. A policy more effective for China itself and for its role in the world economy.”