According to Reuters, Georgieva said that China’s actions to counter its economic slowdown are vital for global recovery.
Kristalina Georgieva, the International Monetary Fund (IMF) Managing Director, said on Thursday, April 21, in a video speech to the Boao Forum for Asia Annual Conference 2022.
She also noted that solutions for the global economy go beyond any one country and require stronger international cooperation.
IMF claimed that China’s strict lockdown policy has affected its economy and disrupted the global supply chain.
Therefore, on Tuesday, the IMF downgraded this year’s forecast for China’s growth to 4.4%, much lower than Beijing’s target, around 5.5%.
Bloomberg reported last week that 477 container vessels carrying metal ore, grains, and other resources had to queue outside China’s ports.
The strict two-phase lockdown in Shanghai that started late last month has resulted in a shortage of port workers.
These two factors slow down the documentation process to unload ships and a lack of truck drivers to transport goods to and from the ports, thus creating heavy port congestion.
In addition, according to Market Watch, Mary Lovely, head of the China program at the Peterson Institute for International Economics, said that China’s economy is facing “real danger signs.”
Lovely noted that consumption and net exports are two main drivers of China’s economic growth. However, these two indicators are showing signs of red flags.
As a result, she concluded, “I think the bottom line is that the growth forecast in China will have to be downgraded again.”
Data of China’s activity last month showed weak growth, and overseas brokerage firms had to adjust their previous growth forecasts for Beijing this year.
Reuters reported that Barclays on Tuesday degraded their already below-consensus prediction to 4.3%, from 4.5% before.
Bank of America cut its previous forecast from 4.8% to 4.2%.
Nomura Holdings Inc., on April 21, downgraded its forecast to 3.9%, from 4.3% previously.