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
