 "China is expected to grow at around 7.75% this year: IMF")
China's economy, the world's second largest, is expected to grow at around 7.75% this year, the IMF forecast today, notwithstanding a moderate slowdown during the first half.
Noting that China's macro-economic policies have been supportive toward achieving this year's growth target, the International Monetary Fund (IMF) said the overall fiscal deficit is likely to be around 2% of GDP, similar to last year.
'China's economy is expected to grow at around 7.75% this year, notwithstanding a moderate slowdown during the first half, with resilient domestic demand offsetting lingering weakness in the external environment,' said the IMF Executive Board at the end of its annual discussion with Beijing.
'Strong growth in total social financing is expected to underpin a slight rebound of activity in the second half of this year. Capital inflows have resumed in recent months and the renminbi has appreciated by around 1.5% against the US dollar in the year through June, and by about 6% in real effective terms.
'International reserves have risen to about $3.44 trillion at the end of March (up from $3.31 trillion at the end of 2012),' the IMF said.
Taking note of the assessment that the Chinese currency renminbi remains moderately undervalued, the IMF Directors considered that a more market-based exchange rate system would facilitate further internal and external rebalancing.
They supported the authorities' policy of restraining foreign exchange intervention, thereby allowing market forces to play a greater role in exchange rate determination.
While China's progress on external rebalancing has been substantial-the current account as a share of GDP is now less than a quarter of its pre-crisis peak in 2007, by contrast, domestic imbalances remain large, it said.
Noting that China's macro-economic policies have been supportive toward achieving this year's growth target, the International Monetary Fund (IMF) said the overall fiscal deficit is likely to be around 2% of GDP, similar to last year.
'China's economy is expected to grow at around 7.75% this year, notwithstanding a moderate slowdown during the first half, with resilient domestic demand offsetting lingering weakness in the external environment,' said the IMF Executive Board at the end of its annual discussion with Beijing.
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Inflation has continued its downward path, and with persistently high investment contributing to excess capacity in many sectors, is likely to remain subdued around three% this year and next, it said.
'Strong growth in total social financing is expected to underpin a slight rebound of activity in the second half of this year. Capital inflows have resumed in recent months and the renminbi has appreciated by around 1.5% against the US dollar in the year through June, and by about 6% in real effective terms.
'International reserves have risen to about $3.44 trillion at the end of March (up from $3.31 trillion at the end of 2012),' the IMF said.
Taking note of the assessment that the Chinese currency renminbi remains moderately undervalued, the IMF Directors considered that a more market-based exchange rate system would facilitate further internal and external rebalancing.
They supported the authorities' policy of restraining foreign exchange intervention, thereby allowing market forces to play a greater role in exchange rate determination.
While China's progress on external rebalancing has been substantial-the current account as a share of GDP is now less than a quarter of its pre-crisis peak in 2007, by contrast, domestic imbalances remain large, it said.