IMF Upgrades China Growth Forecast After Strong Q1

The International Monetary Fund (IMF) has projected Fiji's GDP growth to moderate to 3% this year, citing supply-side constraints in the tourism sector as a primary factor. While the tourism sector's capacity has increased and policies addressing immigration and investment bottlenecks have been introduced, several risks remain. These include a potential slowdown in tourist arrivals, high emigration rates, worsening skilled labor shortages, elevated global commodity prices and shipping costs, and limited fiscal space. The IMF also emphasized that stronger reform momentum could stimulate private investment and growth. Additionally, Fiji's current account deficit narrowed to 7.6% of GDP in 2023, and the public debt-to-GDP ratio declined to 82.7% for the financial year.

In a separate forecast, the IMF has raised its growth outlook for China to 5% this year, up from a previous estimate of 4.6%, driven by strong first-quarter performance and recent policy measures, particularly in the property market. The IMF now anticipates China's GDP growth to reach 4.5% in 2025, an increase from the previous forecast of 4.1%. Despite these upgrades, the IMF expects growth to slow to 3.3% by 2029, attributed to an aging population and slower productivity expansion. The IMF highlighted that while recent economic indicators suggest China has managed some near-term risks, concerns remain about the sustainability of this recovery due to ongoing issues such as a protracted property sector crisis and soft domestic consumption. The Fund has called for more comprehensive policy actions to address these challenges and support sustainable growth.