China has room to top up stimulus if virus outbreak hurts growth: IMF, Latest Business News - The New Paper

China has room to top up stimulus if virus outbreak hurts growth: IMF

This article is more than 12 months old

TOKYO China has room to ramp up stimulus if its economy slows further due to the coronavirus outbreak, but it should not lose sight of structural reforms to address rapid credit growth, a senior International Monetary Fund (IMF) official said yesterday.

Mr Changyong Rhee, director of the IMF's Asia and Pacific Department, said China's growth rate had been moderating even before the outbreak because of "desirable"steps taken by its government to deleverage its economy.

Beijing will likely rely more on stimulus measures this year to keep its economy afloat, though the direct boost to growth will be smaller than past fiscal measures that focused on big infrastructure spending, he told a news conference in Tokyo.

"We understand that if the coronavirus cases slow the Chinese economy... they have policy room" to provide more fiscal stimulus, Mr Rhee said.

"But we hope they can also (continue to) do... structural reform and credit control," he added.

Chinese policymakers have implemented a raft of measures to support the economy as investors feared the disease, named Covid-19, which has claimed the lives of more than 1,100 people in China, could have a damaging impact on growth. - REUTERS