IMF raises China's 2024 economic growth forecast to 5 pct

This panoramic aerial photo taken on Jan. 10, 2023 shows a view of Lujiazui area in the China (Shanghai) Pilot Free Trade Zone in east China's Shanghai. (Xinhua/Fang Zhe)

"In China, resurgent domestic consumption propelled the positive upside in the first quarter, aided by what looked to be a temporary surge in exports belatedly reconnecting with last year's rise in global demand," the IMF said.

WASHINGTON, July 16 (Xinhua) -- The International Monetary Fund (IMF) on Tuesday revised China's 2024 economic growth up to 5 percent in an update to its World Economic Outlook (WEO), from the 4.6-percent forecast in April.

The revision is primarily attributed to a rebound in private consumption and strong exports in the first quarter, according to the update.

"In China, resurgent domestic consumption propelled the positive upside in the first quarter, aided by what looked to be a temporary surge in exports belatedly reconnecting with last year's rise in global demand," it said.

The IMF maintained its forecast for global growth in 2024 at 3.2 percent, noting that Asia's emerging market economies remain the main engine for the global economy.

Global activity and world trade firmed up at the turn of the year, with trade spurred by strong exports from Asia, particularly in the technology sector, the WEO update noted.

World trade volume is expected to grow by 3.1 percent in 2024 and 3.4 percent in 2025, each 0.1 percentage points higher than the April projection.

Photo taken on April 6, 2021 shows the International Monetary Fund (IMF) headquarters in Washington, D.C., the United States. (Photo by Ting Shen/Xinhua)

"Asia's emerging market economies remain the main engine for the global economy. Growth in India and China is revised upwards and accounts for almost half of global growth," IMF Chief Economist Pierre-Olivier Gourinchas said in a blog.

The revision for China's growth prediction was announced in late May by the IMF's first deputy managing director, Gita Gopinath, during a news briefing in Beijing following the conclusion of the IMF team's 2024 Article IV Consultation for China.

The update also noted that the momentum of global disinflation is slowing, signaling bumps along the path. "Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty," it said.

"Further challenges to disinflation in advanced economies could force central banks, including the Federal Reserve, to keep borrowing costs higher for even longer. That would put overall growth at risk, with increased upward pressure on the dollar and harmful spillovers to emerging and developing economies," Gourinchas said.

The IMF chief economist said it is "concerning" that a country like the United States maintains a fiscal stance that pushes its debt-to-GDP ratio steadily higher, with rising risks to both the domestic and global economy. "The increasing U.S. reliance on short-term funding is also worrisome," he said.