IMF projects China's economy will grow by 8.4% in 2021

Photo taken on March 30, 2021 shows an exterior view of the International Monetary Fund (IMF) headquarters in Washington, D.C., the United States. (Photo by Ting Shen/Xinhua)

China's economy is projected to expand by 8.4 percent in 2021, the International Monetary Fund (IMF) said Tuesday.

The figure is 0.3 percentage points above the IMF's January prediction, according to the latest update to its World Economic Outlook (WEO) released at the start of the IMF's and World Bank's spring meetings.

It would mark the country's strongest growth rate since 2011, because "effective containment measures, a forceful public investment response and central bank liquidity support have facilitated a strong recovery," according to IMF.

China's annual GDP growth of 2.3 percent in 2020 indicates that the country led major economies in annual positive growth in 2020 and became the only major one to expand last year.

"Among emerging market and developing economies, China had already returned to pre-COVID GDP in 2020, whereas many others are not expected to do so until well into 2023," the IMF said, noting that its forecast for China is much higher than other major economies, including the United States, Germany and France, although behind India.

The second-largest economy has set its GDP growth rate at over 6 percent for 2021 as its economic recovery gathers steam, with Nomura analyzing that "China may not want to be perceived as 'marking to market' when setting the growth target, and it may not want to slash the growth target next year when the base effect likely subsides."

According to the IMF, China's economic growth in the next year is expected to slow to 5.6 percent. It also warned that pre-COVID-19 risk factors continue to be relevant. For instance, "tensions between the United States and China remain elevated on numerous fronts, including international trade, intellectual property, and cybersecurity."

The IMF has also projected that the global economy will grow by 6 percent in 2021, a rate unseen since the 1970s, thanks to the unprecedented policy responses to the COVID-19 pandemic.