IMF Boosts China’s Growth Outlook to 4.8% for 2025

(Digital Phablet) July 30 — The International Monetary Fund has upgraded its projection for China’s economic growth this year to 4.8 percent, up from an earlier estimate of 4 percent. This marks the most significant upward revision among all major economies in its latest World Economic Outlook report.

The substantial increase reflects China’s stronger-than-anticipated economic performance in the first half of the year, especially noting the remarkable strength of exports, the IMF said in the updated report issued yesterday. The Washington-based organization also predicts the country’s gross domestic product will grow by 4.2 percent next year, slightly higher than its previous forecast of 4 percent.

China’s growth surpassed expectations primarily due to exports, supported by a depreciating Chinese yuan closely tracking the dollar. Declining sales to the United States were more than offset by robust sales to other parts of the world, the IMF explained.

“This growth is partly driven by a very strong first quarter for China’s economic activity, with an especially notable component being the surge in exports to the European Union, Asia, and other global markets,” said IMF Chief Economist Pierre-Olivier Gourinchas.

“However, domestic demand within China remains relatively subdued,” Gourinchas added. “That’s an ongoing concern and something we’ve been highlighting for some time as a potential obstacle to sustained growth.”

The global economy continues to exhibit “fragile resilience amid persistent uncertainty,” with growth projections revised to 3 percent for 2025 and 3.1 percent for 2026, up from previous estimates of 2.8 percent and 3 percent. The IMF noted that these adjustments reflect proactive measures ahead of tariffs, lower effective tariff rates, improved financial conditions, and fiscal expansion in key regions.

“One of the reasons for the upward revision for China is the reduction in tariffs that China was expected to face according to earlier forecasts, following an agreement announced in May between the US and China,” Gourinchas explained.

Nonetheless, trade policy uncertainty remains elevated. The US pause on increasing tariffs for most trading partners is set to expire on August 1, but there is also a recent threat by the US to impose even higher duties than those announced on April 2.

For emerging markets and developing economies, the IMF has raised its forecast to 4.1 percent for 2025—up from 3.7 percent—and to 4 percent for 2026, from 3.9 percent. Still, risks to the global outlook are tilted to the downside, as potential tariff resurgences and ongoing uncertainties could hinder economic activity.

Global inflation is expected to fall to 4.2 percent this year and 3.6 percent next year, although there are notable differences among countries, the IMF added.