The IMF asks China to increase vaccination and recalibrate the strategy to fight the covid

The International Monitoring Fund (IMF) has called on China to increase its COVID-19 vaccines while emphasizing the need to recalibrate the virus strategy to address challenges arising from the real estate sector and slowing demand. global.

This recommendation came after an annual review of China’s economic policies that saw virtual discussions between the IMF and several senior policy officials on reform progress and challenges, and policy responses.

The IMF noted that China withstood the initial shock of the pandemic. However, China’s growth has slowed since then and remains under pressure amid recurring COVID outbreaks, deepening challenges in the real estate sector and slowing global demand.

“Under the zero-COVID strategy, China withstood the initial shock of the pandemic well, allowing the economy to quickly recover from the lockdowns of early 2020 and significantly expand the global supply of medical products and durable goods at a critical time. for the world”. However, China’s growth has slowed since then and remains under pressure amid recurring COVID outbreaks, deepening challenges in the real estate sector and slowing global demand,” said IMF First Deputy Managing Director Gita. Gopinath.

“While the zero-COVID strategy has become more agile over time, the combination of more contagious COVID variants and persistent vaccine gaps have led to the need for more frequent lockdowns, weighing on consumption and private investment, including in housing,” he added.

According to the global lender, the tightening of regulation in the real estate sector, while well-intentioned to rein in high leverage, has added to severe financial strains for developers, leading to a rapid slowdown in home sales and investment. , along with a sharp drop in revenue from the sale of local government land.

This mild rebuke of China’s covid policy comes as the country’s growth is projected at 3.2 percent for 2022, rising to 4.4 percent in 2023 and 2024, under the assumption that the current strategy of zero-COVID will be lifted gradually and safely in the second. half of 2023.

“Risks remain on the downside as the economy faces external headwinds from a global slowdown, further increases in energy prices, and further tightening of global financial conditions. Domestically, the recurring COVID outbreaks and shutdowns and ongoing challenges in the real estate sector remain key risks,” said the IMF Deputy Director General.

“Going forward, a further recalibration of the COVID strategy must be well prepared and include pushing the pace of vaccinations and keeping it at a high level to ensure protection is maintained,” he added.

(Only the headline and image in this report may have been modified by Business Standard staff; all other content is auto-generated from a syndicated feed.)

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