China is likely to become the largest contributor to world growth in 2023 without driving up global inflation, an official at the International Monetary Fund said on Thursday.
Steven Barnett, IMF’s senior resident representative in China, said the fund expects China to contribute about one-third of global growth this year, making the country the single largest contributor to global growth.
According to the IMF’s World Economic Outlook Update in January, the world output is forecast to expand by 2.9 percent this year, to which China is expected to contribute about 1 percentage point, Barnett said.
China’s growth rebound also has a positive growth spillover on other economies, he said, adding that faster growth in China can lift growth in other economies as the country buys more goods from elsewhere while Chinese tourists travel more elsewhere.
“We don’t think that China’s rebound will drive global inflation,” Barnett said. “We do not expect inflation in China to pick up that much.”
China’s economic rebound this year is likely to be driven more by consumption than infrastructure, which means that the spillover effect on commodity prices would be less than previous recoveries, he said.
Barnett made the remarks at a seminar to discuss the global economic situation and elaborate on the World Economic Outlook Update. The event was co-hosted by the IMF’s office in China and the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.
The latest World Economic Outlook Update, released in January, has revised China’s economic growth forecast for 2023 to 5.2 percent, up from 4.4 percent in October.