IMF, China predict economic growth at 5% in 2024

Following the announcement of China’s economic growth figure of 5% in the first half of 2024 by the “National Bureau of Statistics”, the IMF raises China’s economic growth forecast for 2024 to 5%. This move indicates high expectations for the Chinese economy, with China’s GDP growth target of 5% for the current year in 2024, reflecting a measured approach to economic development, with China recognizing the need for sustainable growth. To achieve this goal, additional stimulus measures within China’s national economy may be needed.

The main broad outlines of the Chinese leadership to boost China’s economic growth in 2024 are to work on the need to transform the existing development model to address issues such as the real estate crisis, local government debts and weak consumer demand. This would boost economic growth rates to a higher level. This goal is in line with China’s 14^e five-year plan.

This shows that the Chinese are focusing on attracting long-term investment and addressing deep-rooted problems in the stock market, in line with efforts to restore investor confidence and achieve stability in China’s financial markets.

The International Monetary Fund expects China’s economy to grow 5% in 2024, after a “strong” first-quarter performance, up from previous estimates that called for China’s growth of 4.6%. The International Monetary Fund now expects China to be the world’s second-largest economy: China’s national economy will grow 5% in the current year of 2024.

Over the past three decades, the Chinese economy has been marked by exceptional growth rates that have placed it as the world’s second-largest economy. However, recent years have seen radical transformations that have cast a shadow on the path of this economic giant, as a result of the pandemic and the subsequent “Zero Covid” policy that imposed strict restrictions on economic activity.

This coincided with the slowdown in global economic growth and the deepening crisis in the real estate sector, one of the main drivers of the Chinese economy, not to mention local government debt accumulation and weak consumer confidence. Amid these challenges, the Chinese government launched a package of stimulus measures to support the economy, including key sectors such as real estate and infrastructure.

Positive indicators began to emerge in some economic figures, pointing to signs of recovery in the Chinese economy.

Data from the (Beijing General Administration of Customs) showed that the country’s exports grew faster than expected in May 2024. Exports rose 7.6 percent in May compared to the same period last year in 2023 in dollar terms, beating government expectations of 5.7 percent. Imports, however, rose 1.8 percent in the same period.

In April 2024, China’s exports rose 1.5 percent year-on-year, while imports rose 8.4 percent. In the first five months of the year, exports rose 2.7 percent year-on-year, while imports rose 2.9 percent.

The rise in Chinese exports is a fundamental engine and driver of the Chinese economy. Recent export data is a very important indicator of the strength and growth of the country’s economy, despite geopolitical trade pressures.

The increase in Chinese exports to Southeast Asia is due to a shift of Chinese goods from the European and American direction to this Asian destination, which provides a new base for the Chinese economy, with the success of the stimulus and development measures that the Chinese authorities have taken to address some of the weaknesses in its economy. This confirms China’s determination to achieve growth that can exceed 5% in the current year 2024, which prompted the International Monetary Fund to increase its forecast for the growth of the Chinese economy to 5%, i.e. the same number that the Chinese government had previously planned.

As for my personal expectations as an expert on Chinese political affairs regarding the Chinese economy, I expect a significant increase in China’s economic growth figures in 2024, especially given the strong start of this year. I am confident that the Chinese economy can achieve the annual growth target of around 5%.

Taking a closer look at the figures of China’s key indicators, we see that the share of China’s exports increased by about 10% in the first two months of 2024, and medium- and long-term bank loans increased by more than 30%.

We see that during the annual session of the National People’s Congress of China, the country’s legislative body governed by the ruling Communist Party led by President Xi Jinping, the broad outlines of China’s social and economic policies for the year 2024 were presented. This year 2024, the focus of Chinese legislators in their meetings was to increase interest in projects (scientific and technological innovation, urban-rural integration, food security and energy security), while acknowledging the challenges ahead. But at the same time, they emphasized the enormous potential in demand for construction in these vital areas.

To support the ambitious goals, Chinese economic leaders are exploring various policy tools, including: the potential use of measures such as (lowering reserve ratio requirements to inject liquidity into the Chinese market). In addition, Chinese officials highlighted a plan to invest 1 trillion yuan ($140 billion) in special long-term bonds to boost industries and technologies, particularly in clean energy.

Considering the importance of China’s large market for factory equipment modernization, estimated at about 5 trillion yuan ($694 billion), this indicates that China is committed to modernizing its manufacturing capacity.

To boost exports, China plans to promote higher-quality products, support global small and medium-sized enterprises and make greater use of the global market to boost consumer spending. Tax measures and incentives are planned to encourage households to replace old vehicles, upgrade appliances and redecorate their homes, reflecting the shift to a consumption-driven growth model.