(Yicai) Dec. 11 -- The International Monetary Fund has raised its economic growth forecasts for China this year and next, attributing the upgrades to stimulus measures and lower-than-expected tariffs on Chinese exports.

China's gross domestic product will likely expand 5 percent in 2025, compared with a 4.8 percent forecast in October, the Washington-based IMF announced yesterday. The prediction for 2026 was raised to 4.5 percent from 4.2 percent.

An IMF team, led by China Mission Chief Sonali Jain-Chandra, visited Beijing and Shanghai between Dec. 1 and 10 as part of the fund's 2025 Article IV Mission to China. Managing Director Kristalina Georgieva also took part in the discussions and held a press conference in the capital on Dec. 10.

“Despite sizeable shocks, China’s economy has shown remarkable resilience,” Georgieva said in her opening remarks.

Asked why 2026's forecast is lower than 2025's, she said the moderation reflects two factors: potential trade frictions that could weigh on exports and the time needed for recent economic policy measures to filter through. But she noted that the projected 4.5 percent pace far exceeds the IMF’s 3.2 percent forecast for global growth, underscoring China’s ongoing resilience.

Jain-Chandra said China has shown remarkable resilience despite experiencing multiple shocks in recent years, crediting the recently announced policy measures and reductions in bilateral tariffs between China and the United States.

Inflation in China is projected to rise from 0 percent this year overall to 0.8 percent in 2026, Jain-Chandra added.

“In their 15th Five Year Plan, the authorities have prioritized increasing consumption as a driver of growth,” Georgieva said. “They also recognize the importance of reorienting the economy from goods to services.

“The authorities are already taking steps to raise domestic consumption,” she said. “They have adopted an expansionary fiscal stance, eased monetary policy, and implemented some targeted measures to reduce excess saving and address ‘involution.’”

To facilitate the transition from goods to services, manage risks, and sustain medium-term robust growth, the IMF called for a more urgent and comprehensive policy package focused on expanding domestic demand through expansionary policies and complementary reforms, ensuring macro-financial stability, and implementing structural reforms to boost medium-term growth.

Progress on these three priorities could raise China's GDP by about 2.5 percentage points by 2030, improving living standards and domestic prosperity, while also contributing to a stronger and healthier global economy, Jain-Chandra pointed out.

Editor: Martin Kadiev