People wait to board trains at the Shanghai Hongqiao railway station ahead of the National Day holiday, in Shanghai, China September 28, 2023.
GDP growth could slow to 4.6% in 2024 because of continued weakness in China's property sector and subdued external demand, the IMF said in a press release, albeit better than its October expectation of 4.2% in the IMF's World Economic Outlook (WEO).
The combination of the downturn in the property sector and local government debt crunch could wipe out much of China's long-term growth potential, economists say.
Local debt has reached 92 trillion yuan ($12.6 trillion), or 76% of China's economic output in 2022, up from 62.2% in 2019.
China should also develop a comprehensive restructuring strategy to reduce the debt level of local government financing vehicles (LGFVs), she said.
Persons:
Aly, IMF's, Gita Gopinath, Gopinath, LGFVs, Joe Cash, Ryan Woo, Edmund Klamann, Christopher Cushing
Organizations:
REUTERS, Rights, Monetary Fund, China's, Communist Party, Thomson
Locations:
Shanghai Hongqiao, Shanghai, China, Rights BEIJING, Gopinath