IMF warns Beijing must do its best on consumption or global economy at risk – Asia

IMF warns Beijing must do its best on consumption or global economy at risk – Asia

International Monetary Fund Managing Director Kristalina Georgieva warned Thursday that a prolonged slowdown in China’s economy could affect the entire world. The institution put China’s GDP growth forecast at 4.4%, well below the 5.5% target set by Beijing.

Despite this “black” scenario, spurred by the disruptions in supply chains and the restrictions imposed by Beijing in recent weeks to combat a new wave of Covid-19 that has devastated some of the country’s financial centers such as Shanghai, Kristalina Georgieva, however, confirmed a sign of hope that invites To take action by Beijing to counter this slowdown.

“Fortunately, China has the political space to support its macroeconomic policy, including shifting the focus to vulnerable households to boost consumption, which can also help support climate goals. [de Pequim]The Director-General of the International Monetary Fund warned against directing economic activity towards sectors with low carbon emissions.

“What we see in China is that consumption is going down, not recovering as strongly as it needs to,” Georgieva said during a press conference as part of the annual spring meetings of the International Monetary Fund and the World Bank.

For the IMF leader, it is essential that Beijing “instead of directing money to public investment, put it in people’s pockets, so that there is a consumption ‘boom’ that leads to more dynamism.” [na economia chinesa].

In line with the International Financial Corporation, many investment banks around the world have lowered their estimates of the growth of the Chinese economy for this year. Japan’s Nomura was the last to release its forecast, pointing to 3.9% GDP growth (versus 4.35 previously estimated).

At the start of the week, Barclays also lowered its forecast from 4.5% to 4.3%, accompanied by Bank of America, which indicates Chinese GDP growth of 4.2% this year (versus 4.8% previously expected).

China’s Ministry of Commerce said Thursday that it will implement specific measures to boost consumption recovery. In the first quarter, consumption made up 69.4% of China’s GDP, according to data provided by Beijing.

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