International Monetary Fund predicts China to witness economic decline over next four years: Report

Washington, DC: The International Monetary Fund predicted China's economic decline to continue over the next four years as Beijing continues to tackle a range of challenges, including a rapidly aging population, higher unemployment and a property crisis, VOA News reported.

In a report released on Friday, the IMF projected that China's economic growth will reduce to 4.6 per cent this year, down from its 5.2 per cent growth in 2023, and drop further to 3.4 per cent by 2028.

The property market has been a particular area of trouble for the Chinese economy lately, with a Hong Kong court on Monday directing Chinese property giant Evergrande to liquidate.

According to IMF analysis released on Friday, the real estate investment is likely to see a drop from 30 per cent to 60 per cent in the next 10 years relative to 2022 levels, VOA News reported.

The IMF report reads, "Absent a comprehensive restructuring policy package for the troubled property sector, real estate investment could drop more than expected, and for longer, with negative implications for domestic growth and trading partners."

Christopher Tang, Senior Associate Dean of Global Initiatives at the University of California Los Angeles Anderson School and Faculty Director of the UCLA Center for Global Management, stressed that the real estate crisis is closely related to Chinese consumers' spending habits.

In an email statement to VOA, Christopher Tang stated, "As they see their equity in their home investment declining, they spend less on everything - lower consumer spending, the demand falls which reduces production and hence slower economic growth."

Tang added, "There is a domino effect when the real estate market is so huge and intertwined with decades of aggressive housing development and easy lending from banks." Tang stressed that China needs to promote new demand-side economic policies and ease market regulations. (IANS)

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