IMF Keeps Its Forecast for China's Economic Growth at 4.5% in 2026

SadaNews - The International Monetary Fund has maintained its forecast for economic growth in China at 4.5% this year, but warned of risks from weak domestic demand and a slowing global economy.

IMF Managing Director Kristalina Georgieva told reporters in Beijing in December during a press conference held at the end of the Fund's discussions with the Chinese government regarding the 2025 report that she urged policymakers there to take the "brave choice" of accelerating structural reforms and reducing the $19 trillion economy's dependence on exports.

The Fund stated that real GDP grew by 5% in 2025, achieving Beijing's official growth target for this year, but noted that the GDP deflator continued to decline.

The "worse than expected" contraction in the real estate sector is described as the main local risk to the economy, urging policymakers to prioritize the transition to a consumption-driven model.

Deflationary pressures are expected to persist, with inflation expected to rise gradually only amid ongoing economic surplus. In the medium term, growth slowdown is anticipated to continue due to declining workforce numbers, lower returns on investment, and slow productivity growth.

While a resurgence in trade tensions represents the main external downside risk, additional economic policy stimulus or a cooperative resolution to trade tensions represents upside risks.