The International Monetary Fund raised its growth estimate for China for the second time this year while also cautioning that deep reforms are still needed to break away from debt-fueled expansion.
The world’s second-largest economy will expand by 6.7 percent in 2017, the Washington-based fund said in its annual report on Article IV consultations published Wednesday. That’s up from a 6.6 percent estimate in the economic outlook released in April and 6.5 percent forecast in January.
It’s unusual for the IMF to update forecasts outside of its scheduled global economic outlook series, though officials have signaled that a strong first quarter hadn’t fully been reflected in earlier releases. IMF First Deputy Managing Director David Lipton said in a statement Wednesday that China should use its current momentum to push reforms through.
"While some near-term risks have receded, reform progress needs to accelerate to secure medium-term stability and address the risk that the current trajectory of the economy could eventually lead to a sharp adjustment," Lipton said in Beijing after meetings with top policy makers. "It is critical to start now while growth is strong and buffers sufficient to ease the transition."
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