This week the International Monetary Fund (IMF) said that it is forecasting that the Chinese economy will grow 5.4% in 2023, due to third quarter results which beat expectations, as well as new measures being implemented by the government in Beijing. The IMF had earlier projected China’s economy would grow 5% in 2023.

The press release noted that it appeared the economic growth would meet the targeted growth rate of the government., following a strong post-pandemic recovery.

According to the IMF, continuing weakness in the property market will combine with subdued demand, causing GDP growth to slow in 2024 to 4.6%. That forecast is more optimistic than the forecast from the World Economic Outlook (WEO), which predicted that 2024 would see China’s economy grow 4.2%.

In its report, the IMF said, “These projections reflect upward revisions of 0.4 percentage points in both 2023 and 2024 relative to October WEO projections due to a stronger-than-expected Q3 outturn and recent policy announcements,” adding it saw core inflation increasing to 2.1% by the end of next year, as the output gap continued to shrink.

Growth is projected to decline gradually after that to 3.5% by 2028, as the nation faces a weakening of productivity and its population begins to age.

Gita Gopinath, the IMF’s first deputy managing director, said, “The authorities have introduced numerous welcome measures to support the property market, but more is needed to secure a quicker recovery and lower economic costs during the transition.”

The upgrade to China’s growth forecast came after the government’s approval last month of a 1 trillion-yuan bond issue, and the passage of a bill which would allow local governments to frontload a portion of their bond quotas, as a means of supporting the nation’s economy.