The head of the International Monetary Fund, Christine Lagarde, has said the outlook for China’s economy is not all “doom and gloom”. “I would say that it’s a recovery that is decelerating a bit,”, but it is expected to gain momentum next year. “We are seeing massive transitions at the moment,” she said.
After double-digit growth for decades, China’s economy slowed to 7.4% last year. The government has said it expected growth to slow further to about 7% this year. However, the IMF has forecast growth of just 6.8%. Ms Lagarde said that changes around the world were producing new situations, including emerging market economies having to cope with much lower commodity prices. “Whether you look at China transitioning from one growth model to the other, from one exchange currency method to another, and we have to adjust as a result.
On China’s efforts to shift from an export-led economy to a consumer-led one, Ms Lagarde said the IMF was “very supportive of the transition that is taking place at the moment”.
She noted China’s efforts towards better management of its currency exchange rate and interest rates movements and expected the country’s government to better communicate to the world what was going on in its economy “over the course of time”.
“You don’t move just overnight from being heavily controlled to being market determined, with massive market expectations that suddenly the situation should be the same across the world,” Ms Lagarde said.
“It just doesn’t happen that way.”
