The International Monetary Fund (IMF) has urged China to accelerate reforms aimed at shifting its economic growth model from exports to stronger domestic consumption, warning that structural challenges such as weak consumer demand, slowing productivity, and an ageing population will continue to weigh on the country’s economy. Speaking at a regular IMF briefing, Communications Director Julie Kozack said these long-standing issues remain a major concern despite a modest improvement in China’s short-term growth outlook.
The IMF projects China’s economy to grow by 5 percent in 2025 before slowing to 4.6 percent in 2026. While the 2026 forecast has been slightly upgraded from the Fund’s earlier estimate, Kozack said persistent weakness in domestic consumption and rising external imbalances highlight the need for deeper structural reforms. She also pointed to declining productivity and demographic pressures as key challenges facing the world’s second-largest economy.
According to the IMF, China should adopt stronger macroeconomic policies to boost household spending and reduce high savings rates, while continuing reforms in the country’s struggling property sector. The Fund believes that increasing domestic consumption, alongside structural reforms, will be essential for ensuring more balanced and sustainable long-term economic growth.
