IMF Photo: VCG

The IMF on Tuesday raised China's GDP growth forecast for 2024 to 5 percent in its latest World Economic Outlook (WEO), pointing to a steady rebound in domestic consumption and a surge in exports. The move also indicates growing global confidence in the outlook for the world's second-largest economy. 

Coming a day after China reported robust 5 percent GDP growth for the first half of 2024, the IMF's upward revision of its forecast showed improving expectations for a stable and sound rebound in the Chinese economy, despite lingering challenges, experts said. And expectations will likely further improve as the ongoing third plenary session  of the 20th Central Committee of the Communist Party of China is expected to map out reforms that will propel China's high-quality development, they noted.

In its WEO update for July, the IMF projected China's GDP will grow by 5 percent in 2024, which represents an upward revision of 0.4 percentage points compared with the April WEO report. 

"In China, resurgent domestic consumption propelled the positive upside in the first quarter, aided by what looked to be a temporary surge in exports belatedly reconnecting with last year's rise in global demand," the WEO said.  
The revised projection is also in line with a 5 percent growth forecast announced by IMF officials in May, as well as China's growth target of around 5 percent for 2024. 

"For the outlook in the second half, both domestic and international views are very confident about 5 percent growth. This is also what the IMF's assessment is based on," Bian Yongzu, executive deputy editor-in-chief of Modernization of Management magazine, told the Global Times on Tuesday, noting that the IMF's latest revision is more accurate than its previous projection given recent economic data from China. 

The IMF's move came just a day after Chinese official data showed on Monday that China's GDP expanded by 5 percent in the first half of 2024 to 61.68 trillion yuan ($8.49 trillion), thanks to robust 5.3 percent growth in the first quarter and a slightly lower growth rate of 4.7 percent in the second quarter.

Notably, even as the IMF raised China's growth forecast, it left its projections for 3.2 percent global growth unchanged, while noting that the global economy is "in a sticky spot." It also painted a gloomier outlook for major economies, including the US. In the US, "after a sustained period of strong outperformance, a sharper-than-expected slowdown in growth reflected moderating consumption and a negative contribution from net trade," the IMF said. 

The contrast also showed that China's 5 percent growth is hard-won given the persistent challenges in the global economy as a whole, experts said. Robust growth in exports, rising 6.9 percent year-on-year in the first half, were a highlight in China's economic recovery during the period, they noted.

"The external environment was not so peaceful and there is growing trade protectionism. However, China's foreign trade achieved a relatively good result, which is directly linked to China's economic competitiveness. And this is also a source of growing confidence in China's economy," Bian said. 

Bian further noted that many people are expecting more proactive economic policies and reform measures from the ongoing third plenary session.

The session, which kicked off on Monday and will run through Thursday, plays a critical role in China's reform and opening-up and is expected to focus on further deepening reform and expanding high-level opening-up, in order to promote high-quality development and advance Chinese modernization.