International Monetary Fund (IMF) chief Kristalina Georgieva said on Tuesday (December 13) that the international body is ‘very likely’ to downgrade China’s growth forecast for this year and the next, reported AFP. Her comments have come as China faces increasing number of Covid cases as it eases restrictions after nearly three years.
China has begun easing Covid restrictions after enforcing its strict ‘Zero-Covid policy’ which had battered its economy in the firsr place. Now, the rising infections due to easing of restrictions ” is going to create some difficulties over the next months” as well, Georgieva said.
“But it is likely that as China overcomes this in the second half of the year, there could be some improvement in growth prospects,” she said.
The zero-Covid policy, characterized by snap lockdowns, international travel restrictions and mass testing, took a heavy toll on consumers and businesses, with demonstrations against the measures eventually erupting in major Chinese cities.
The IMF earlier warned that tough virus restrictions have been especially hard on China’s residents.
In October this year, the IMF cut its growth projection for China to 3.2 per cent. This is the lowest growth forecast in decades. It is expected that growth will rise to 4.4 per cent next year.
But “very likely, we will be downgrading our growth projections for China, both for 2022 and for 2023,” Georgieva said.
(With inputs from agencies)
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