IMF predicts 7.5 percent growth rate in China
( 2003-09-18 14:38) (Xinhua)
The International Monetary
Fund (IMF) says the projected economic growth rate for China will be 7.5 percent
both in 2003 and 2004, compared to 8 percent last year.
In a report released in Dubai Thursday and entitled World Economic Outlook,
the IMF said while activity surged in China in the first quarter of this year,
led by exports and strong investment, growth slowed in the second quarter,
mainly reflecting the impact of severe acute respiratory syndrome (SARS) which
killed over 800 people worldwide.
"In China, the expectation remains that SARS will constitute a temporary
shock, with no lasting impact on the medium-term outlook, and activity is likely
to rebound from the third quarter this year, helped by continued strong
investment and rapid credit expansion, including for consumer lending," the
The strength of the external position, the desirability of gearing monetary
policy toward domestic stabilization objectives, and the need to facilitate
adjustment to structural changes over the medium term underscore the importance
of moving gradually to greater exchange rate flexibility, the report added.
"Fiscal consolidation remains a key objective for the medium term, given the
sizeable contingent liabilities associated with banking weakness, pension reform
costs, and the need to improve the social safety net and health care," it said.
The IMF report noted that banking reform, faster asset disposals by asset
management companies, and restructuring and privatization of state-owned
enterprises remain key structural reform priorities.