IMF chief Kristalina Georgieva stated on Tuesday (December 13) that it is ‘highly likely’ that the organisation will lower China’s growth prediction for this year and the following year. Her remarks come as China sees an increase in Covid cases as it begins to relax restrictions after almost three years.
Following the stringent enforcement of its ‘Zero-Covid policy,’ which has already severely harmed its economy, China has started to relax the country’s COVID regulations. Now, Georgieva said, the escalating illnesses brought on by the relaxation of limitations ‘is likely to generate some complications over the next months.’
‘But it is likely that as China overcomes this in the second half of the year, there could be some improvement in growth prospects,’ she said.
Consumers and businesses were severely affected by the zero-Covid policy, which was marked by sudden lockdowns, limits on overseas travel, and mass testing. Protests against the policies finally broke out in key Chinese cities.
IMF had issued a warning that citizens of China have been particularly hard-hit by tight virus bans.
The IMF revised its growth forecast for China down to 3.2% in October of this year. The forecast for growth is at its lowest level in years. Next year, growth is predicted to increase to 4.4%.
However, Georgieva predicted that ‘quite likely, we would be reducing our growth predictions for China, both for 2022 and for 2023.’
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