SURAT, Feb 19 (Pravasi Samvad) — China’s economy grew 5% in 2025, propelled by robust exports and government policy, the International Monetary Fund (IMF) said after completing its annual review of the country’s policies.
China’s domestic private demand stayed weak last year, while inflation averaged zero and the GDP deflator continued to fall, the IMF said.
Low prices relative to trading partners pushed down the real exchange rate, boosting exports and lifting the current account surplus to an estimated 3.3% of GDP.
The IMF expects growth to slow to 4.5% in 2026 as the impact of tariffs and trade uncertainty persists. The Fund said deflationary pressures would remain and inflation would rise only gradually. Over the medium term, it expects growth to ease further because of an ageing workforce, lower investment returns and slower productivity gains.
The IMF warned risks to the outlook were tilted to the downside. A deeper slump in the property sector and high debt levels could weaken domestic demand further, while renewed trade tensions remain the main external risk. Additional policy support or progress in resolving trade disputes could improve prospects, it added.
Executive Directors praised China’s resilience, but said its growth model faces rising challenges. They urged Beijing to shift towards consumption‑led growth and welcomed the focus on boosting household spending in the 15th Five‑Year Plan.
Directors called for stronger fiscal support until deflation pressures ease, with more spending aimed at households and stabilising the property sector. They also pushed for structural reforms, including stronger social protection, reduced local government over‑investment and a scaling back of industrial policies that distort markets.
They highlighted the need to address local government financing vehicle debt, improve financial oversight and enhance transparency. Directors also encouraged China to work with global partners to ease trade tensions and use national‑security‑related trade curbs carefully.
