The International Monetary Fund has lifted its forecast for China’s economic growth in 2017 to 6.7% from 6.6% on the back of “policy support, especially expansionary credit and public investment.”
The latest outlook adjustment follows the IMF’s decision to raise the forecast for China’s 2017 GDP growth to 6.6% in April.
The Chinese economy posted growth of 6.9% in Q1 2017, far surpassing the official full year target of 6.5%.
The IMF expects China to post average growth of 6.4% during the period from 2018 – 2020, and advocates the acceleration of reforms to facilitate transition towards a more sustainable growth model.
The IMF praised China’s ongoing efforts to curb risk in the financial sector despite the short-term pain that such policy adjustments can can create,
“The critically important recent focus on tackling financial sector risks should continue, even if it entails some financial tensions and slower growth,” said the IMF in an official statement.
It also called for China to continue to advance towards a more flexible exchange rate, while declaring the Renminbi to be “broadly in line with fundamentals.”