China is able to boost its economy despite headwinds because it has “ample” room for maneuver in both monetary and fiscal policy, the head of the International Monetary Fund said on Wednesday.
China’s growth “remains in positive territory”, IMF Managing Director Kristalina Georgieva told a virtual press conference at the 2022 Spring Meetings of the IMF and World Bank, adding that China’s growth China was downgraded primarily due to disruptions caused by COVID-19 lockdowns.
In its latest World Economic Outlook (WEO) report released on Tuesday, the IMF cut its global growth forecast for 2022 by 0.8 percentage point to 3.6% amid the Russian-Ukrainian conflict.
China’s economy, meanwhile, is expected to grow 4.4 percent this year, 0.4 percentage point lower than the previous projection, followed by 5.1 percent growth in 2023, according to the report.
According to data released Monday by China’s National Bureau of Statistics, the country’s GDP grew 4.8% year-on-year in the first quarter, marking a steady start to 2022 in the face of global challenges and a resurgence in COVID cases. -19.
“We see China capable of stimulating the economy, because it has plenty of policy space,” Georgieva told Xinhua at the press conference.
“We have seen in recent days the People’s Bank of China take steps to ease credit conditions,” she said. “And he also has space in terms of fiscal policy.”
During the press conference, Georgieva also said that the Russian-Ukrainian conflict has resulted in a massive setback for the global economy, the latest WEO growth forecast down for 143 countries.
Developments surrounding the Ukraine crisis have contributed to rising consumer prices in many parts of the world and disrupted global supply chains of various commodities.
“There is one more looming over our heads, the risk of geopolitical fragmentation, which could jeopardize the development gains of the past 75 years,” she said, adding that it also leaves countries unable to cope with the current crisis and other pressing issues. global challenges such as climate change.
Looking back, the IMF chief noted that there are “enormous” benefits from cooperation and an integrated global economy, with global GDP tripling since 1990 and poverty reduced from 2 billion to 650 million.
“If we want to protect the gains of cooperation, we need to make sure those gains are visible,” Ms Georgieva said, urging policymakers to fix the “loopholes” of past globalization, including the unequal distribution of benefits of growth.