The International Monetary Fund (IMF) recommends that the Chinese government adopt fiscal stimulus measures and maintain the accommodative monetary policy, in an effort to accelerate the recovery from the effects of the strict restrictions to control the coronavirus implemented over the past year.
In a report after an official mission to the Asian country, the IMF points out that Chinese economic growth slowed significantly in 2022, after an “impressive recovery” in 2021.
According to the institution, the second largest economy on the planet remains vulnerable to new variants of Covid-19, the reduction in global demand and the liquidity crisis in the real estate market.
As already announced last week, the Fund forecasts that the Chinese Gross Domestic Product (GDP) will grow by 5.2% this year.
The tendency is for inflationary pressures to remain balanced in the short term, according to the analysis.
In this scenario, the directors of the IMF concluded that Beijing needs to continue with a fiscal policy aimed at families and that strengthen social protection. They also advocated structural reforms that reduce the real estate sector to a more reasonable size and also to increase productivity.
“In particular, ensuring competitive neutrality between private and state-owned companies, removing protectionism and through greater dependence on market forces”, emphasize the directors, adding that the Chinese play a fundamental role in dealing with the challenges of the international community.
Source: CNN Brasil
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