China's Economic Growth Surpasses Expectations, Calls for Domestic Demand Focus

China's economy grew by 5% in 2024, exceeding the IMF's forecast of 4.8%. IMF Chief Economist Pierre-Olivier Gourinchas urged China to focus on domestic demand as a growth engine, while noting trade uncertainty. China is raising the retirement age to stabilize growth at 4.5% by 2026.

China's economy grew by 5% in 2024, surpassing the IMF's forecast of 4.8%, as announced by IMF Chief Economist Pierre-Olivier Gourinchas on Thursday. This unexpected surge has prompted a slight adjustment to the IMF's future growth estimates for China, projecting 4.6% for 2025 and 4.5% for 2026.

While acknowledging the role of fiscal measures in bolstering economic momentum, Gourinchas emphasized the need for China to shift towards domestic demand as a key driver of growth. He warned that the world's second-largest economy couldn't rely on external trade, urging Chinese authorities to intensify efforts in this direction to mitigate risks posed by global trade uncertainties.

The strategy includes raising the retirement age as approved by China's legislature, aiming to ease labor supply declines and steady growth rates. This move is projected to stabilize growth at 4.5% by 2026, mitigating potential spillover effects on emerging markets and the global economy.

(With inputs from agencies.)