The International Monetary Fund (IMF) has revised up China's economic growth forecast for this year following strong economic data in the first half of 2025 and the impact of U.S.-China tariffs being less severe than first feared, according to Marshall Mills, the IMF's senior resident representative in China. In an update to its World Economic Outlook (WEO) on Tuesday, the IMF says it projects China's 2025 economic growth to now hit 4.8 percent, up from its 4.0-percent forecast made back in April.
This revision reflects China's stronger-than-expected activity in the first half of the year and the significant reduction in U.S.-China tariffs, the WEO report said. Meanwhile, China's expected GDP growth for 2026 is also revised upward by 0.2 percentage points to 4.2 percent, according to the report.
In an interview with the China Global Television Network (CGTN), Mills noted the adjustment to the IMF's growth projection comes on the back of China's "very strong" growth figures in the first six months of the year, which he said has been driven by China's exports and stimulus measures. "The upgrade in our projection for China's growth is due mainly to two factors. First, the very strong data in the first half of the year. And second is lower tariffs than we expected in April. So growth in the first half of the year was 5.3 percent, very strong, and that is boosting our projection for the whole year," he said.
"Secondly, net exports are performing very well for China and that has helped boost growth. Some fiscal stimulus has helped boost demand. The trade-in program, also clearing local government arrears, has helped with demand, but it still remains weak, in part because of a correction in the real estate sector, which is suppressing household consumption and confidence," he continued.
Looking further ahead, Mills also stressed that while the country's net exports have significantly contributed to economic growth in recent years, further reforms may be necessary to maintain growth levels as other challenges lie ahead.
"Net exports have contributed significantly to China's growth historically and recently. We do expect that contribution to lessen in the coming quarters. And that will contribute to our projection for the year as a whole, which is 4.8 percent, lower than the first half. And we will continue in our projections going forward. So we do see growth slowing in China next year and in the years after that. Without further reforms, we would foresee growth slowing to as low as 3.5 percent in the medium term, say in the next five years, due to the aging population and slowing productivity growth," he said.
IMF raises China's economic growth forecast following strong H1 data
U.S. President Donald Trump said Monday that he has instructed the Pentagon not to launch military strikes on Iran Tuesday as U.S. allies in the Gulf are working to help reach an acceptable peace deal.
"We will NOT be doing the scheduled attack of Iran tomorrow," Trump wrote on Truth Social.
The president added that he has further instructed the Pentagon "to be prepared to go forward with a full, large scale assault of Iran, on a moment's notice, in the event that an acceptable Deal is not reached".
Trump said "serious negotiations" are taking place and that, in the opinion of Gulf leaders, a deal will be made, which will be "very acceptable" to the United States, all countries in the Middle East, and beyond.
"This Deal will include, importantly, NO NUCLEAR WEAPONS FOR IRAN!" he wrote.
Trump said he held off on the planned attacks at the request of leaders from Qatar, Saudi Arabia and the United Arab Emirates.
Also on Monday, Trump said he is "not open" to any Iranian concessions after receiving Tehran's updated response to a peace deal one day earlier.
Iran knows "what's going to be happening soon", he said in a phone interview with the New York Post.
Asked about his Friday remarks that he would be willing to accept a 20-year moratorium on Iranian uranium enrichment, Trump interjected: "I'm not open to anything right now."
The White House believes the latest offer from Iran is insufficient for a peace deal, U.S. online media Axios reported earlier on Monday, citing a senior U.S. official.
Iranian President Masoud Pezeshkian said on Monday that it is not correct to chant slogans against holding negotiations. "We negotiate with dignity and will never back down," according to a statement published on the website of his office.
Speaking at a meeting in Tehran, Pezeshkian said Iran is capable of defending its rights.
Iran has handed over its latest 14-point proposed plan for ending the war with the United States to mediator Pakistan, the semi-official Tasnim news agency reported on Monday.
Pakistan will convey the plan to the United States, the report said, citing a source close to Iran's negotiating team.
The new proposal was submitted after Tehran revised its earlier 14-point draft in response to a recent U.S. proposal, the source added.
According to the source, Iran's new draft focuses on negotiations to end the war, as well as on the U.S. "trust-building" measures.
Iran insists that the frozen overseas assets of Iran must also be "clearly and effectively" returned. Additionally, Iran is firm in demanding compensation from the United States.
In a separate report on Monday, Tasnim quoted another source close to the Iranian negotiating team as saying that, unlike previous U.S. drafts, Washington has agreed in its latest proposal to waive Iran's oil sanctions during the negotiation period.
Tasnim said Iran insists that the removal of all sanctions must be among the U.S. commitments. The United States, however, has proposed suspending sanctions imposed by the Office of Foreign Assets Control until a final agreement is reached, it said.
Iran, the United States and Israel reached a ceasefire on April 8 after 40 days of fighting that started with U.S. and Israeli attacks on Tehran and other Iranian cities on Feb 28.
Following the truce, Iranian and U.S. delegations held one round of peace talks in Pakistan's capital Islamabad on April 11 and 12, which failed to yield an agreement.
Over the past weeks, the two sides have reportedly exchanged several proposed plans outlining conditions for ending the conflict through Pakistan.
Trump says no US military strikes on Iran Tuesday as allies push for deal
Trump says no US military strikes on Iran Tuesday as allies push for deal
