The International Monetary Fund said China's economy is expected to grow by 8.1 percent this year, as it updated its outlook for the world's second-largest economy amid the new situation of coronavirus infections and the effects of policy support, forecasting a sustainable and more balanced recovery in 2021.

"China has been very successful in containing the pandemic, and that has played a very important role to bring back activity much more quickly," Gita Gopinath, the economic counselor and director of the IMF's Research Department, said during a virtual news conference on Tuesday.

Although the updated projection in the IMF's World Economic Outlook released on Tuesday was 0.1 percentage point down from that in October, it was higher than the 7.9 percent forecast the World Bank made on Jan 5.

China has been very successful in containing the pandemic, and that has played a very important role to bring back activity much more quickly.

Gita Gopinath, Economic counselor and director of the IMF's Research Department

Economic recovery in China was "ahead of all large economies", Gopinath wrote in a blog post. She called on the international community to act swiftly to ensure rapid and broad global access to vaccinations and therapeutics, maintain targeted economic lifelines to households and firms, ensure financial stability and help poorer nations combat the crisis.

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Data from the National Bureau of Statistics showed that China's full-year GDP growth rate reached 2.3 percent on a yearly basis in 2020, and the rate rebounded to 6.5 percent in the fourth quarter mainly driven by strong exports and manufacturing output.

Malhar Nabar, a division chief at the IMF's Research Department, said, "The public infrastructure-spending support, and also the support that was extended to affected households and to firms, (was) reinforced by aggressive actions by the People's Bank of China, the central bank, to provide liquidity support and ensure that credit provision remains strong."

People's Bank of China Governor Yi Gang said during a virtual panel discussion of the World Economic Forum on Tuesday that China won't shift suddenly from its supportive monetary measures, and the monetary policy will continue to "prop up the economy".

The central bank will keep a balance between supporting economic recovery and preventing risks, such as a rising macro leverage ratio and higher nonperforming loans, he said.

"We will ensure that policy is consistent and stable and will not exit prematurely from a supportive policy," said Yi.

China's monetary and fiscal policy will focus on maximizing employment, and the authorities are taking measures to boost the contribution of consumption to the economy, Yi added.

China's GDP is now back to its pre-COVID trend after the remarkable recovery last year, and some increased virus cases in January may have a limited impact on the overall economy, according to Shan Hui, chief China economist at Goldman Sachs.

The US brokerage kept its forecast of China's economic growth at a rate of 8 percent in 2021, 6.6 percent for the United States, and 6.5 percent for the whole world.

"Most of the credit slowdown that we expect from 2020 to 2021 has already taken place," Shan told China Daily on Wednesday. "We do not expect further declines in total social financing stock growth" especially after government officials have repeatedly emphasized "policy continuity" in recent weeks.

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Shan expected China's monetary policy stance to remain neutral this year, with greater emphasis on measures such as lending to small and medium-sized enterprises, rural development and green financing.

In the updated report, the IMF revised its projection for global economic growth to 5.5 percent this year, compared with 5.2 percent in its October forecast, thanks to the stronger than expected recovery in the past six months, policy support since the end of last year and vaccination efforts.

But global growth is likely to moderate to 4.2 percent in 2022, the IMF indicated.

Peacetime contraction

IMF economist Gopinath noted that even though the predicted decline of the world economy this year would be less serious than previously projected, due to stronger than expected growth in the second half of last year, it remains the worst peacetime global contraction since the Great Depression of the 1930s.

Just like among advanced economies, emerging markets and developing countries also are projected to follow diverging paths to recovery, according to the 190-member lending organization.

"Considerable differentiation is expected between China－where effective containment measures, a forceful public investment response, and central bank liquidity support have facilitated a strong recovery－and other economies," the IMF said.

Contact the writers at chenjia@chinadaily.com.cn