China has “broad” political space to boost the economy amid headwinds

International Monetary Fund Managing Director Kristalina Georgiava said on Wednesday that China is able to bolster its economy against headwinds because it has “wide” policy space, both in monetary and fiscal policy.

(Corey Hancock / International Monetary Fund / Xinhua)

China’s growth ‘remains in positive territory’, Ms Georgieva said at a virtual press conference as part of the IMF and World Bank Spring Meetings, adding that growth in China has been reviewed when set back by disruptions from COVID-19-related lockdowns. . .

In its latest World Economic Outlook report published on Tuesday, the International Monetary Fund cut its global growth forecast for 2022 to 3.6%, a decrease of 0.8 percentage points, in the context of the conflict between Russia and Ukraine.

In addition, China’s economy is expected to grow by 4.4 percent this year, 0.4 percentage point lower than previous forecasts, according to the report, which said it is expected to grow by 5.1 percent in 2023.

(Corey Hancock / International Monetary Fund / Xinhua)

“We believe that China is able to stimulate the economy, because it has a large political space,” Georgieva told Xinhua at the press conference.

“We have seen the People’s Bank of China in recent days take steps to ease credit conditions,” she said, adding that “it also has room at the fiscal policy level.”

The managing director of the International Monetary Fund noted that the conflict between Russia and Ukraine has caused a massive setback to the global economy, with lower growth prospects in 143 countries.