Beijing, June 9 (IANS) China’s adjustment of monetary policies to stabilize growth and its determination to support higher quality growth has won praise from the International Monetary Fund (IMF).
“We support the authorities’ ongoing effort to promote higher quality growth while at the same time fine-tune macroeconomic policies to help ensure that growth does not slow too much,” International Monetary Fund First Deputy Managing Director David Lipton said Friday.
China Daily reported Saturday that Lipton made the comments after a meeting with Vice Premier Wang Qishan and a discussion with People’s Bank of China Governor Zhou Xiaochuan.
Lipton said the Chinese measures should include raising household incomes, liberalizing the financial system and strengthening the social security system.
On Thursday, the central bank announced a lowering of the benchmark one-year interest rate by 25 basis points, the first cut since December 2008, to combat a further slowdown.
Robert Mundell, a Nobel Prize winning economist, told China Daily that it was a good idea to lower interest rates and more cuts in the reserve requirement rate are expected.
“The effects will be seen in the long run,” Mundell said.
The IMF predicted that a hard landing was impossible for China’s economy with the ongoing policy stimulus, although this year’s growth may moderate to about 8 percent amid slowing global demand.
In addition, inflation is likely to remain below 4 percent for the whole year, according to the IMF.