IWF-Generaldirektorin Kristalina Georgieva auf dem G-20-Gipfel in Neu Delhi Bild: Reuters
According to the International Monetary Fund, the rapidly growing economy relies too heavily on infrastructure investments. In order for China to achieve economic stability, there needs to be an increase in consumer demand.
DThe International Monetary Fund is urging China to address its local and global growth issues. „We advise China to utilize its political flexibility in order to shift its growth model towards more domestic consumption,“ stated Kristalina Georgieva, the head of the International Monetary Fund (IMF), in an interview with Reuters news agency.
The IMF is urging China to boost weak domestic consumption, address the struggling real estate sector, and contain local government debt. „The traditional approach of pumping more money into the economy will not be productive in the current situation.“
The IMF will strongly urge Beijing to shift its growth model away from debt-driven infrastructure investments and real estate. The relevant recommendations will be handed over to the Chinese authorities in the upcoming IMF „Article IV“ analysis of Chinese economic policy.