China’s economy shows signs of stabilising, IMF says

The news: The International Monetary Fund is seeing some signs of stabilisation in China's economy from recent data, but has urged reforms to counter a slowdown in coming years.

The numbers: The IMF believes China can achieve around 5% growth this year. However, the Asian giant’s GDP growth is expected to slow to about 3.5% over the medium term, a view also shared by private forecasters.

The context: IMF chief spokesperson Julie Kozack said China can accelerate growth over the medium term if it takes steps to reform its economy to rebalance from investment toward consumer spending. The statement comes as the country’s recovery from COVID-19 lockdowns falters and a massive downturn in its property sector weighs on consumer demand. Some analysts see a growing risk that China will drift into an era of Japan-like stagnation with an ageing population and slowing productivity growth.