IMF Upgrades China's GDP Forecast Following Policy Shifts

The International Monetary Fund (IMF) has raised its growth forecast for China to 5.4% for 2023, citing better-than-expected third-quarter growth and recent policy announcements by Beijing. However, the IMF still expects growth to slow next year to 4.6% due to weakness in the property market and subdued external demand. The IMF also highlighted elevated financial stability risks in China, including lower capital buffers and growing asset quality risks. The Chinese government has taken steps to support the struggling real estate sector and local governments, while also increasing the budget deficit. The IMF welcomed these measures but emphasized the need to minimize economic costs and contain risks to macrofinancial stability.