(Yicai Global) May 31 -- The International Monetary Fund expects China's economic growth to weaken slightly to 6.6 percent this year before moderating to 5.5 percent by 2023.
"We are confident that China will rebalance to a sustainable growth mode," the IMF said in a statement yesterday, commending the nation's shift from high-speed to high-quality growth. China's growth domestic product grew 6.9 percent last year, the fastest since 2015, despite regulators looking to cut back on financial risk created by vast amounts of debt.
China's higher quality growth will inevitably lead to a slower rate of advancement, but this is normal and controllable, said James Daniel, assistant director at the IMF's Asia and Pacific Department. He led an IMF team on a two-week visit to China ending yesterday, visiting Beijing and Shenzhen.
The Washington-based organization did imply that China's credit growth is still too fast, but commended its efforts to make adjustments.
"Reforms progressed in several key areas: financial sector de-risking accelerated, with a wide range of decisive measures adopted; credit growth slowed; overcapacity reduction progressed; anti-pollution efforts intensified; and opening up continued," David Lipton, the IMF's first deputy managing director, said in the statement.
The IMF also suggested the People's Bank of China maintain stable liquidity and continue to cut the required reserve ratio and make more open market operations.
Editor: James Boynton