IMF predicts faster China growth, rising debt

IMF predicts faster China growth, rising debt

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The International Monetary Fund increased its estimate for China's average annual growth rate through 2020, while warning that it would come at the cost of rising debt that increases medium-term risks to growth. China's economy will expand at an average pace of 6.4% annually from 2017 through 2020, compared with a 6% estimate a year earlier, the IMF said in its Article IV review, the South China Morning Post reports. Household, corporate and government debt will increase to almost 300% of gross domestic product by 2022 from 242% last year, fund staff estimated. President Xi Jinping has been pushing financial regulators to address excessive borrowing at state enterprises and has said their indebtedness is "the priority of priorities." But ending the addiction to debt requires measures that include allowing companies to fail and sweeping shifts in the way capital is allocated that policymakers have yet to fully embrace.