China’s economy will grow faster than expected over the next three years because of the government’s reluctance to rein in “dangerous” levels of debt, the International Monetary Fund warned on Tuesday.
In an annual review of the world’s second-largest economy, IMF staff said China’s annual economic growth would average 6.4 per cent in 2018-20, compared with a previous estimate of 6 per cent. The IMF is also predicting that the Chinese economy will expand 6.7 per cent this year, up from its earlier forecast of 6.2 per cent growth.
The Chinese government, which pledged to double the size of the economy between 2010 and 2020, has tolerated a rapid run-up in debt in order to meet its target. “The [Chinese] authorities will do what it takes to attain the 2020 GDP target,” the IMF said.