IMF Projects China Growth: Staff Upgrades Forecast to 5.0% for 2025, Urges Shift to Consumption-Led Model
London-UK, December 12, 2025
IMF Projects China Growth: Stronger-Than-Expected Export Resilience
The International Monetary Fund (IMF) has delivered a notable revision to its outlook for the world’s second-largest economy, with the latest IMF Projects China Growth forecast being upgraded to 5.0% for 2025.
This Staff Upgrades Forecast represents a 0.2 percentage point increase from the IMF’s previous estimate and comes after the conclusion of the Fund’s annual Article IV consultation mission to Beijing and Shanghai.
The primary reason for the revision is the surprising resilience and strength of China’s outbound shipments, which generated a record trade surplus this year and pushed net exports to contribute significantly to the 5.2% growth recorded in the first three quarters of 2025.
The upward revision provides a degree of immediate good news for the global economy, as China remains a crucial engine of world growth, currently expected to contribute about 30% of total global expansion.
The IMF team, led by Mission Chief for China Sonali Jain-Chandra, noted that the revised outlook also reflects recent macroeconomic policy stimulus measures, including expansionary fiscal policies and monetary easing designed to support the property sector and boost consumption.
However, the report also contained a sharp warning, as the IMF Urges Shift to Consumption-Led Model, cautioning that the current reliance on production and exports is creating trade imbalances and structural vulnerabilities that could derail long-term stability.
Headlines Points
Growth Forecast Upgraded:Â
The IMF Projects China Growth at 5.0% for 2025, a 0.2 percentage point increase from its earlier estimate, reflecting surprising economic resilience.
Export Strength:Â
The Staff Upgrades Forecast is largely driven by China’s strong export performance, which delivered a record trade surplus and significantly boosted GDP growth.
Consumption Shift Urged:Â
The IMF Urges Shift to Consumption-Led Model, warning that over-reliance on production and industrial policy is creating global trade tensions.
Structural Reforms Needed:Â
The Fund called for a more forceful policy package to address persistent issues in the property sector and increase social spending.
Global Contribution:Â
China is expected to contribute approximately 30% of total global economic growth in 2025, underscoring its pivotal role in the world economy.
The Dual Edge of the Production Model
The IMF’s consultation highlights the dual edge of China’s production-and-export-heavy economic model. On one hand, strong exports have stabilized the economy against a turbulent global backdrop, meeting the government’s annual growth target.
On the other hand, the massive export surplus is increasingly viewed by Western trading partners as a form of state-sponsored economic aggression.
Critics argue that the production powerhouse is deliberately exporting its way out of its own domestic overcapacity, driving global commodity prices down and sparking protectionist measures, such as the newly approved tariffs in Mexico.
The IMF explicitly called for China to “curb exports” and reduce the size of state industrial policy support. Mission Chief Jain-Chandra suggested that reducing industrial policy support would not only ease global trade tensions but also generate fiscal savings.
These savings, the IMF argued, should be immediately reallocated to increase social spending and provide more robust support to the ailing real estate sector.
The long-term goal for Beijing, according to the IMF, must be to transition away from its traditional investment-and-export engine to a sustainable, consumption-driven economy, ensuring that Chinese households feel secure enough to spend their money.
A Call for Forceful Policy
The report also addressed the persistent weakness in China’s housing market, which continues to pose the single largest risk to financial stability. While the government has taken targeted steps to support the sector, the IMF noted that a “more forceful policy package” is required.
This likely includes accelerating the restructuring of debt-laden property developers and establishing a more comprehensive mechanism for completing stalled housing projects, providing certainty to buyers.
The Staff Upgrades Forecast for 2025, while positive, is tempered by a projected cooling of growth to 4.5% in 2026. This slowdown is predicted as the effect of the current stimulus measures wanes and global demand for Chinese exports moderates.
In summation, the IMF recognizes China’s resilience but delivers a firm prescription: the short-term tactical success of strong exports cannot substitute for the difficult, yet necessary, structural reforms required to balance the economy toward domestic consumption and address the property sector’s systemic risks.
Failure to make this shift, the Fund implies, could not only stall China’s long-term growth but also exacerbate global trade friction.
