IMF Projects China's Economy To Grow by 7.9% in 2021

The International Monetary Fund (IMF) on Friday said that China's economy will expand by 7.9 percent in 2021 following a 1.9 percent growth in 2020.

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"The Chinese economy continues its fast recovery from the pandemic, helped by a strong containment effort and swift policy actions to mitigate the impact of the crisis," the IMF executive board said, adding that "policymakers have provided financial relief and fiscal support to protect the most-affected firms while safeguarding financial stability."

IMF executive directors called for a continuation of the "moderately supportive" fiscal and monetary policies until China's recovery is on solid ground.

As the recovery takes hold, the temporary measures supporting the financial sector should be replaced with policies to address problem loans and strengthen regulatory and supervisory frameworks.

The directors also welcomed continued progress on China's structural reforms, particularly in further opening up of the financial sector and improving labor mobility through reforms to the "Hukou system", which manages migration of workers from the countryside to the city."

"Structural reform will be key to boosting potential growth, reduce external imbalances, and build a more resilient, green, and inclusive economy," they said.

In its latest Global Economic Prospects, the World Bank also expected China's economy to expand by 7.9 percent in 2021.