IMF Raises China's 2025 Growth Forecast to 4.8% Amid Global Slowdown

The International Monetary Fund (IMF) has announced an upward revision to its economic growth forecast for China in 2025, projecting the nation's economy to expand by 4.8%. This updated outlook, detailed in the latest World Economic Outlook (WEO) report released on Tuesday, October 14, 2025, marks a significant increase from previous estimates, even as the IMF anticipates a broader slowdown in global growth. The 4.8% figure for China is 0.8 percentage points higher than its April 2025 forecast and 0.3 percentage points above its October 2024 projection.

Reasons Behind China's Upgraded Outlook

The IMF attributed the more optimistic forecast for China primarily to stronger-than-expected economic activity observed in the first half of 2025. A key factor contributing to this performance was a significant reduction in US-China tariffs, which eased trade tensions and supported economic momentum. Additionally, the IMF noted the strength of China's exports to regions beyond the United States, including Southeast Asia, Africa, and Europe, which helped offset a decline in shipments to the US. Domestic factors, such as fiscal expansion and relatively robust domestic consumption, also played a role in bolstering growth, alongside front-loading in international trade.

Global Growth Projections and Persistent Risks

While China's outlook improved, the IMF's latest report indicates a deceleration in overall global growth. The fund projects global economic expansion to slow from 3.3% in 2024 to 3.2% in 2025, further moderating to 3.1% in 2026. This 3.2% global forecast for 2025 represents a modest 0.2 percentage point increase from the July forecast, largely due to a milder-than-anticipated impact from tariffs and agile responses from the private sector, including rerouting supply chains. However, this figure remains a cumulative 0.2 percentage point downgrade compared to pre-policy shift forecasts from October 2024. Despite the upward revision for China, the IMF highlighted several lingering concerns. These include weak domestic demand, a property sector that remains on 'shaky footing' four years after its bubble burst, and sluggish credit demand. The IMF's chief economist, Pierre-Olivier Gourinchas, noted that China's economy has become increasingly reliant on exports, raising questions about the sustainability of this growth model. The fund suggested that China should consider rebalancing its economy towards household consumption, potentially through fiscal measures focusing on social spending and addressing the property sector.

Uncertainty in the Global Economic Landscape

The global economic landscape continues to be marked by considerable uncertainty. The IMF warned of ongoing risks from protectionism and potential increases in trade tariffs, which could negatively impact global output. Other downside risks include fiscal vulnerabilities in highly indebted economies, potential financial market corrections, and the possibility of global inflation remaining elevated, projected at 4.2% in 2025. The report also drew parallels between the current surge in AI investment and the dot-com boom of the late 1990s, cautioning about the potential for market repricing if lofty profit expectations are not met.