IMF keeps China 2026 GDP forecast at 4.5% but warns of risks to growth

XIAN, China, Feb 19 (Reuters) - The International Monetary Fund maintained its economic growth forecast for China at 4.5% this year but warned of risks from weak domestic demand and a slowing global economy as it published its annual review of the Chinese economy for 2025 on Wednesday.

IMF Managing Director Kristalina Georgieva told reporters in Beijing in December that she had urged Chinese policymakers to make the "brave choice" of speeding up structural reform and reducing the $19 trillion economy's reliance on exports, during a press conference at the end of the Fund's discussions with the Chinese government over the 2025 report.

KEY DETAILS:

• Said real GDP grew by 5% in 2025, meeting Beijing's official growth target for the year, but noted the GDP deflator had continued to decline

• Called a "deeper-than-expected" contraction in the property sector the main domestic risk to the economy

• Renewed escalation of trade tensions is the main external risk, the Fund said

• Urged policymakers to make transitioning to a consumption-led model the overarching priority

• Recommended a cut in industry support by reducing the amount the government makes available in subsidies from 4% of GDP to 2%

• Urged authorities to restructure the debt of unsustainable local government financing vehicles and take steps to prevent future debt buildup