China's 2021 growth forecast lowered to 7.9% by International Monetary Fund

International Monetary Fund has lowered its 2021 growth forecast for China to 7.9 percent as it says that growth is still ‘unbalanced’ as recovery from pandemic has relied ‘heavily on public support while private consumption is lagging’. As per report, GDP growth is projected at 1.9 per cent in 2020 and 7.9 per cent in 2021, as ecomic activity continues to rmalize and domestic outbreaks remain under control. Also, core inflation is expected to remain subdued which leaves CPI inflation in 2020-21 below pre-crisis target of about 3 per cent. 

new report 

“ current account surplus is projected to widen to 1.9 percent of GDP in 2020 from 1.0 percent in 2019, before narrowing to below 1 percent in 2021”, says report. temporary increase this year reflects  lower commodity prices, collapse in tourism and a surge in exports of pandemic-related and or goods. structural reforms have also progressed despite pandemic. However, y are t even across key areas. Various openings of financial sector have also advanced with a shortening of negative lists for foreign investment. 

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Factors like macroecomics and financial policies have supported recovery. Various policymakers have provided financial relief and fiscal support to protect firms which were most affected. This was done to safeguard financial stability. Also, this will help in providing liquidity to banking system, expanding re-lending facilities to smaller enterprises and introducing a repayment moratorium until Q1 2021.

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Chinese authorities have also increased e disbursement and cover of unemployment insurance to help vulnerable households. y have also provided tax reliefs and waived social security contributions by employers. Various reforms like ‘hukou reforms’ improved labour mobility. Patent law was also amended to strengn intellectual property protection.

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(Im Credits: Twitter/@IMFNews)