Beijing — China’s short-term growth outlook has strengthened but there is growing risk of a sharp adjustment in the medium term due to reliance on stimulus to meet targets and a credit-expansion path that may be "dangerous", says the IMF. On Tuesday, the IMF raised its forecast for China’s average annual growth from 2018-20 to 6.4% from 6.0% and said there was now a greater chance that authorities would meet their target of doubling 2010 real GDP by 2020. But it warned of the consequences to long-term economic health. The main cost of stronger growth "is further large increases in public and private debt", the IMF said in its annual review of China’s economy. "International experience suggests that China’s current credit trajectory is dangerous with increasing risks of a disruptive adjustment and/or a marked growth slowdown", the report reads. The IMF estimated that China’s economy would have grown about 5.5% annually from 2012-16 if credit was expanded at a "sustainable" pace, com...
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