China must set 6.5-7.0 percent GDP expansion target for 2015 and refrain from stimulus measures unless there is a risk that growth will fall sharply below that range, Reuters cited the International Monetary Fund (IMF) as saying Thursday.
Some of its directors hold that view that an even-lower growth target is appropriate, the IMF was quoted as saying in the conclusion of its annual Article IV economic consultation with China.
“Regarding the growth target for 2015, while most directors concurred that a range of 6.5-7.0 percent would be consistent with the goal of transitioning to a safer and more sustainable growth path, a few other directors considered a lower target more appropriate,” the IMF said.
It repeated its projection that the economic growth would dip to 7.4 percent this year, and decelerate further to 7.1 percent next year.
“A key uncertainty remains in the real estate sector, some further weakness could be building and because of the very large direct and indirect importance of this sector, this still poses a risk to the near-term outlook,” Markus Rodlauer, deputy director of the IMF’s Asia Pacific Department, was quoted as saying.
Such near-term risks in the economy remain manageable due to the government’s policy buffers, but Beijing must push reforms as the current path of growth is unsustainable, he said.
The IMF urged Beijing to free up bank deposit interest rates, remove implicit guarantees in the financial and corporate sectors, and open more industries up for competition.
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