The world’s second largest economy appears to be collapsing in the face of Chinese President Xi Jinping’s stubbornness. All measures are proving unsuccessful. The figures that have come out for the third quarter are less than 5 percent, which is much less than the same period of the last financial year. Now even the IMF has reduced China’s growth forecast as a warning. Which is equal to the estimate of the Chinese government. IMF has said that if there is no improvement in China’s recovery, then the global economy may face a major shock by the year 2025. Let us see and try to understand what is the growth of China and in which direction it is going.
China’s economic growth is less than 5 percent
China’s economic growth declined to 4.9 percent in the third quarter of July-September due to lack of demand and slowdown in the real estate sector. According to official data, the economic growth rate of the world’s second largest economy was 4.9 percent in the third quarter, which was 6.3 percent in the same period last year. However, analysts had estimated a growth rate of 4.5 percent during this period. China’s economy grew 1.3 percent in the third quarter on a quarter-on-quarter basis, compared to 0.8 percent growth in the April-June quarter.
Have taken some steps, but not enough
The Chinese government has taken several policy steps in the last few months to improve the economy. This includes spending on infrastructure, cutting interest rates and relaxing restrictions on home buying in an effort to revive the real estate sector. Even after that these steps are proving inadequate. However, experts say that if these steps were not taken, the situation could have been even worse. However, the government has set a growth target of 5 percent for the entire year.
IMF gave a blow
The International Monetary Fund (IMF) has reduced its GDP estimates for China for 2023 and 2024. The IMF said that the recovery of the world’s second largest economy is happening “slowly”. IMF has cited the slowdown in the property sector as the main reason for this. The IMF said in its outlook that the growth of the world’s second largest economy is expected to be at the rate of 5 percent this year and 4.2 percent next year, which is less than the IMF’s April forecast of 5.2 percent and 4.5 percent. Due to which China’s GDP may decline by 1.6 percent by 2025, while global GDP will decline by 0.6 percent.
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