IMF calls for China to ramp up fiscal spending amid growth slowdown

The International Monetary Fund has urged Chinese policymakers to deploy more substantial fiscal stimulus to support economic expansion as the world's second-largest economy faces a period of decelerating growth.

According to the IMF's latest projections, China's economic growth is expected to slow progressively, falling from 5% in 2025 to 4.5% in 2026, before declining further to 4% in 2027. The forecasts underline concerns about the sustainability of China's recovery following recent economic headwinds, including weak domestic consumption and persistent property sector challenges.

The Fund's recommendation for increased fiscal measures comes as Beijing faces pressure to bolster confidence in its economy and support domestic demand. Stronger government spending could help counteract deflationary pressures and provide a buffer against external uncertainties affecting regional trade dynamics.

The IMF's guidance reflects broader international concerns about China's economic trajectory and its implications for regional growth, particularly across Southeast Asia where Chinese demand remains a critical driver of exports and investment flows.