Key facts
- IMF official calls for bigger fiscal stimulus in China.
- IMF projects China's economic growth to slow to 4.5% this year.
- IMF notes China's economy is 'teetering on deflation'.
A senior International Monetary Fund official urged China on Thursday to deploy larger fiscal stimulus measures to combat deflationary pressures and weak domestic demand. Krishna Srinivasan, director of the IMF's Asia and Pacific Department, stated that while the IMF welcomed existing fiscal support, it was limited in size and scope. The IMF's World Economic Outlook projects China's economic growth to slow to 4.5% this year from 5.0% in 2025, further declining to 4.0% in 2027. Srinivasan noted that growth is primarily driven by external demand, indicating a lack of rebalancing. He called for increased fiscal stimulus to reflate the economy and address the prolonged property crisis.