China’s lower growth a ‘new normal’, IMF says

The International Monetary Fund has urged the global community to accept lower growth in China as the ‘new normal’ going forward.

In its biannual take on global growth prospects published on Tuesday, the Washington-based lender cut its 2016 growth forecast to 3.4% from 3.6%. The outlook for global growth in 2017 was lowered to 3.6% from 3.8%.

In tandem with the data release, the IMF cautioned that China is adjusting to the new normal of slower growth banking on domestic consumption and a weaker yuan, something which global markets have to contend with and not overreact to, especially in the commodities sphere.

“The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth prospects in 2016-17,” the IMF noted further.

China had its own growth projections for 2016 and 2017 maintained at 6.3% and 6% respectively.