According to Gita Gopinath, the Deputy Managing Director of the International Monetary Fund (IMF), China could see a sharp recovery in economic growth from the second quarter onwards based on current infection trends after the dismantling of most health restrictions.
Speaking on the sidelines of the World Economic Forum in Davos, Gopinath stated that “They moved away dramatically away from their zero code policy we are seeing infections rise that’s going to have an effect on economic activity in the first couple of months of this year.” However, she also noted that “at least looking at the trends inflation Trends and if sorry the infection Trends and if those persist we could see a very quick recovery starting from you know after the first quarter of the theory maybe even sooner in some places.”
Gopinath went on to say that “we expect growth in China to come back to rebound if growth in China comes in in the like the four percent Plus ballpark then I think you know given that Global demand is slowing even if China comes back up that you know those would be balancing factors.” She also acknowledged the possibility of a stronger than expected recovery in China, stating that “if say growth in China comes in much more strongly which is a possibility uh then we could see another spike in uh oil prices for instance or in Energy prices.”
Overall, Gopinath’s comments indicate that the IMF is optimistic about China’s economic recovery in the coming months, but also notes that the country’s recent rise in infections may have an impact on economic activity in the short term.