Some news from late in the day yesterday re the IMF cutting its GDP projection for China.
From the IMF’s First Deputy Managing Director David Lipton
- IMF has cut its 2015 economic growth forecast for China to about 7% (from 7.3% it had forecast in April)
- Urged authorities to avoid further stimulus measures and concentrate on curtailing financial risks instead:
“We are not counselling stimulus at this point”
“We don’t think there are sufficient signs that would warrant that”
- Unless China’s economy is at risk of missing the government’s growth target of about 7.5% this year by a substantial margin, Lipton said more stimulus is unwarranted
- Said Beijing must keep its word on implementing reforms that will correct imbalances, including a “moderately undervalued” yuan
- The IMF said conditions are right for China to take the next step in freeing its interest rates market
Said threat to China is its persistent reliance on debt and investment in areas such as real estate to power its economy – weaknesses that are growing and which will hurt it in the long run if they are not corrected
More at Reuters
