29 May 2013 10:28 [Source: ICIS news]
SINGAPORE (ICIS)--The International Monetary Fund (IMF) has cut its forecast GDP growth for China this year to “around 7.75%” from 8%, expecting the world’s second biggest economy to show a moderate improvement in activities in the second half of 2013.
The projection represents no major improvement on the 7.8% expansion recorded last year, but is slightly higher than China’s official target of 7.5%.
“The pace of the economy should pick up moderately in the second half of the year , as the recent credit expansion gains traction and in line with a projected mild pick-up in the global economy,” the multilateral institution said in a statement at the close of its recent consultation visit with Chinese authorities.
Inflation in China is expected end the year at around 3%, with the country’s external current account surplus seen at 2.5% of GDP, the IMF said.
The IMF said that China’s broad challenges for its reform agenda include “embedding strong governance in lower-level state or state-related economic institutions, especially the banks, state-owned enterprises, and local governments".
It also highlighted the country’s need for “continued liberalization and reduced government involvement, allowing a greater role of market forces”, as well as “a decisive push for rebalancing toward higher household incomes and consumption”.
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