The international Monetary Fund has cut China’s GDP growth in 2019 to 6.2 percent following trade friction with the United States.
This latest news is a major surprise as two months earlier, the IMF increased China’s GDP growth forecast to 6.3 percent. However, the events over last month underlined the risks of trade deals with Chinese companies. And as a result, the IMF has lowered the GDP.
IMF deputy managing director David Lipton said, “Growth is expected to moderate to 6.2 per cent and 6 per cent in 2019 and 2020 respectively. The near-term outlook remains particularly uncertain, given the potential for further escalation of trade tensions.”
In the statement, he said that risks involving Chinese economy will go higher in the coming months if the frictions between the U.S. and China worsen in the coming months. The IMF also predicts that the inflation rate will rise to 2.3 percent this year which will result in higher consumer goods prices. However, this figure is lower than Beijing’s 3 percent inflation target for the current year.