IMF: China remains resilient in global financial system

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A photo showing the seal for the International Monetary Fund (IMF) in Washington, DC./CFP

The global economy is heading for its weakest medium-term growth in more than 30 years, the International Monetary Fund (IMF) last week warned in its latest World Economic Outlook.

The IMF expected global growth to be around 3 percent in 2028 – the lowest medium-term forecast in an IMF World Economic Outlook report since 1990.

The report said global economic growth has slowed in recent years because of rising interest rates and the Russia-Ukraine conflict. Meanwhile, the high inflation and banking strains in the U.S. and Europe are adding uncertainty to an already complex economy.

The IMF said that "with the recent increase in financial market volatility, the fog around the world economic outlook has thickened."

"Uncertainty is high and the balance of risks has shifted firmly to the downside so long as the financial sector remains unsettled," the IMF added.

People's Bank of China headquarters in Beijing, China, November 12, 2020. /CFP

Tobias Adrian, financial counsellor and director of the Monetary and Capital Markets Department of the IMF, said that large emerging market economies, including China, had remained resilient.

"So, when you look at the total flows into the emerging market, China is by far the largest recipient of global capital, and that is good for the Chinese economy," Adrian added.

Despite a slowdown in global growth in 2023, the IMF is positive about China's growth prospects.

Thomas Helbling, deputy director of the Asia and Pacific Department of the IMF, said that the IMF projected the Chinese economy will experience a strong growth rebound in 2023, and the government's growth target of around 5 percent is close to the IMF's forecasts.