Beijing: China’s declining productivity and increasingly aging population are likely to cause the Asian superpower to continue experiencing economic slowdowns in the coming years, according to a report released by the International Monetary Fund (IMF) on Friday, February 2.
Due to rising geopolitical tensions, a property sector debt crisis, and declining global demand, the second-largest economy in the world had some of its worst growth in decades last year.
Furthermore, an IMF analysis released on Friday predicted that growth would further slow to 3.5% by 2028 “due to headwinds from weak productivity and population aging,” with significant uncertainty around the prognosis.
It had earlier predicted a 4.6% increase for this year.
A protracted crisis in the nation’s real estate sector, which was once a major economic engine but is now engulfed in debt that could endanger China’s financial system, is the primary cause of the slowdown.
With staggering debts totaling more than $300 billion, real estate behemoth Evergrande has come to represent the industry’s problems.