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Economic Buzz: Subdued Private Consumption And Real Estate Investment To Weigh On Chinese Economic Momentum Says IMF

Economic Buzz: Subdued Private Consumption And Real Estate Investment To Weigh On Chinese Economic Momentum Says IMF

January 28, 2022 2:27 IST | capital market
The International Monetary Fund (IMF), stated in a latest update that Chinas recovery is well advanced, but it lacks balance and momentum has slowed. The slowdown is attributed to the rapid withdrawal of policy support, the lagging recovery of consumption amid recurrent COVID-19 outbreaks despite a successful vaccination campaign, and slowing real estate investment following policy efforts to reduce leverage in the property sector. GDP growth is projected at 7.9 percent in 2021 and 4.8 percent in 2022, with the deceleration in 2022 partly reflecting the fading of base effects, while subdued private consumption and real estate investment are adding headwinds. As a result, significant slack in the economy is expected to remain in 2022 with core CPI inflation projected to stay subdued and below the target of about 3 percent. The current account surplus is expected to narrow in 2022 to 1.5 percent of GDP from 1.8 percent in 2021 as demand for pandemic-related exports normalizes.

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