IMF Sees 9.6% Growth for China Amid Risks
By wchung | 23 Apr, 2026

China will continue to drive global economic development with a GDP growth rate of 9.6 percent this year, predicted the International Monetary Fund Wednesday.

But its economy still face risks from high inflation, a property bubble and a decline in credit quality from excessive bank loans, cautioned the IMF. It also noted that China’s effort to rebalance its economy will require an appreciation of its currency to facilitate a more “comprehensive transformation” to increase household income, reduce household and corporate savings, boost domestic consumption and reduce its reliance on exports. That process of moving toward a more market-based system is projected to take three to five years.

But China’s financial reform is seen as a “risky undertaking” that “needs to be managed carefully.”

The IMF’s findings followed a visit to China May 23 and June 9 by a team to collect economic and financial information and hold discussions with Chinese officials including Vice-Premier Wang Qishan, Minister of Finance Xie Xuren and People’s Bank of China Governor Zhou Xiaochuan. The IMF then released an 83-page staff report on China and a 15-page spillover report on the effect of China’s growth on other countries.

China has increased its impact on the global economy and holds “an important stake for the world in its stability”, the report concludes.

The report notes that China has made progress in changing its GDP-based growth model while expanding its social safety net and introducing policies for affordable housing. It also predicts that inflation will start to “move to (a) downward trend” toward the end of the year.

China’s key challenges are to “balance the need for containing inflation, sustaining strong growth, and accelerating the transformation of the growth model”, according to IMF executive director for China He Jianxiong and Zhang Zhengxin, senior adviser to the executive director.

“The task is complicated by the difficult external environment, which acutely constrains macroeconomic policy options and rebalancing efforts,” said their statement. This appears to refer to the impact of the 2008 financial crisis combined with the quantitative easing by the U.S. and the EU that has sent large amounts of foreign investment capital surging into China’s economy, adding to inflationary pressures.

He and Zhang disagreed with the IMF staff assessment that China’s yuan is undervalued, arguing that the IMF report is based on “the assumption of unchanged policies and constant exchange rate” and “ignores the trend exchange rate movement and the far-reaching legally-binding rebalancing measures that will be implemented in the medium term.”