IMF urges China to deploy bigger fiscal stimulus
FXI•An IMF official said China should provide more fiscal stimulus as its economy teeters on deflation. The IMF forecast growth of 4.5% this year, down from 5.0% in 2025, and 4.0% in 2027.
1. Call for more stimulus
Krishna Srinivasan, director of the IMF's Asia and Pacific Department, said China's fiscal support was limited in size and scope and that more was needed until the economy reflates. He said most of China's growth was explained by external demand and that a rebalancing had not materialized.
2. Growth and property outlook
The IMF projected China's growth to slow to 4.5% this year from 5.0% in 2025, citing weak domestic demand, and to slow further to 4.0% in 2027. Srinivasan said the property crisis had lingered too long and reiterated proposals to rehabilitate the real estate sector, including boosting household confidence and building social safety nets.
