(Yicai Global) July 26 -- China could do more to buttress its economic growth momentum by making sure that pre-sold properties are delivered and by targeting support at families, according to the head of the World Economic Studies division of the International Monetary Fund’s research department.

“That could really raise confidence, strengthen consumption, with positive implications for the region,” Daniel Leigh said at a press conference yesterday.

According to the IMF's latest World Economic Outlook report released at the conference, expectations for China's economic growth remain at 5.2 percent this year and 4.5 percent in 2024, but the makeup of that growth has changed. 

Consumption growth is consistent with the IMF's forecast in April, but investment in real estate underperformed due to the ongoing slump in the property market, though stronger-than-expected net exports partly offset the weak investment.

“China has been rebounding strongly after the reopening of the economy in the end of last year, and the first quarter was very strong,” said Pierre-Olivier Gourinchas, chief economist at the IMF. “But it's true that we have seen some weakening of economic activity in the second quarter.

“And the growth numbers that we have reflect that expected weakening, going forward -- a weakening that has two components,” he said. One relates to property sector woes weighing on consumer confidence, and the other to relatively low growth in the global economy at 3 percent, meaning less demand for Chinese goods, Gourinchas noted.

“We see the measures that the authorities have taken to strengthen confidence in the real estate sector and their extension to 2025 as a positive step,” Leigh noted. This could raise confidence, strengthen consumption, and have positive implications for China, he added.

Global economic growth will likely fall to 3 percent this and next year from 3.5 percent in 2022, the report said. Growth in advanced economies will slow to 1.5 percent this year from a 2.7 percent clip the year before, while that of emerging markets and developing economies will remain stable at 4 percent.

If China's policy support, especially through income-tested household transfer payments, is stronger than anticipated, the recovery could be sustained with a positive global spillover effect, the report said.

Editor: Martin Kadiev