IMF says slashes China growth forecast for this year to 4%-OxBig News Network

International Monetary Fund (IMF) Chief Economist Pierre-Olivier Gourinchas (C) and IMF Research Department Deputy Director Petya Koeva Brooks (R) take questions as they speak on the “World Economic Outlook” during the IMF/World Bank Group Spring Meetings in Washington, DC, on April 22, 2025.
| Photo Credit: AFP

The IMF said Tuesday it now believed China’s economy will only grow by four percent this year, well below Beijing’s official target as it fights a mounting trade war with the United States.

China and the United States – the world’s two largest economies – are engaged in a mounting tit-for-tat trade row that has sparked global recession fears and rattled markets.

China faces tariffs of up to 145% on many products, with others receiving even higher levies. Beijing has responded with duties of 125% on US goods.

Also read | China retaliates with 125% tariffs against U.S. imports

Also contributing to downward pressure on growth in the Chinese economy are a persistent crisis in the property sector, local government debt and sluggish consumer spending.

In view of an increasingly uncertain landscape in which “downside risks dominate”, the International Monetary Fund said, the Chinese economy is expected to grow four percent this year.

The figure, which was published Tuesday in the fund’s latest World Economic Outlook report, is slower than the 4.6% expansion it predicted for China in January.

The forecast sits a full percentage point lower than Beijing’s official 2025 growth goal of around five percent – the same as last year and a figure considered ambitious by many economists given the headwinds with which China is grappling.

Growth next year is also now forecast by the IMF to be four percent, down from the previous projection of 4.5%.

The cuts reflect doubts about the ability of the world’s second-largest economy to hold up against mounting domestic pressures and heightened hurdles for exports from the manufacturing powerhouse.

“For China, the prolonged weakness in the real estate sector and its ramifications, including those for local government finances, have been key,” said the IMF.

The report noted that consumer confidence in the country has not recovered since plunging in early 2022, adding that China is among the tariff recipients most heavily affected by U.S. President Donald Trump’s recent trade blitz.