Tag: Outlook

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IMF cuts China’s growth as property market concerns grow

China growth at risk

The International Monetary Fund (IMF) has issued a warning about the potential decline of China’s property market while reducing its growth forecast for the world’s second-largest economy.

In a report published Tuesday, The IMF has reduced its growth forecast for China this year to 4.8%, which is 0.2 percentage points below its July projection. For 2025, the IMF reportedly anticipates growth to be at 4.5%.

The IMF has pointed out that the unexpected contraction of China’s property sector is among several factors posing risks to the global economic outlook.

‘The real estate market could face worsening conditions, potentially leading to further price declines amid a drop in sales and investment’, the report indicated.

The report referenced past property crises in countries such as Japan in the 1990s and the U.S. in 2008, suggesting that if China’s situation is not managed, property prices may fall even more.

According to the IMF‘s World Economic Outlook, this could undermine consumer confidence, leading to lower household spending and domestic demand.

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Bank of England governor worried over UK growth outlook

Central Banks are struggling to catch-up with inflation

The governor of the Bank of England, Andrew Bailey has raised concerns over economic growth as he warned again that interest rates will not be cut in the ‘foreseeable future’.

The bank boss said he was concerned over the UK economy’s potential to grow. It comes after the government’s forecaster cut its growth outlook for the UK, due to high inflation, interest rates, energy and food price increases which were exacerbated by the Covid pandemic and Russia’s invasion of Ukraine.

Inflation, which is the rate consumer prices rise at, has dropped sharply in recent months, falling to 4.6% in the year to October largely as a result of lower energy prices.

However, it is still more than double the Bank of England’s 2% target and Mr Bailey warned lowering inflation further would be ‘hard work’.

Interest rates are currently at 5.25%, a 15-year high, which has pushed up borrowing and mortgage costs.

The Bank of England (BoE) failed abysmally to maintain inflation at 2%.