In its latest World EconomicOutlook report, the International Monetary Fund (IMF) has reduced its forecast for China's gross domestic product growth in the current year to 8.0 percent, down from its previous prediction of 8.2 percent made in April this year. In addition, the IMF has also reduced its estimate for China's GDP growth rate in 2013 to 8.5 percent, from its previous prediction of 8.8 percent. Meanwhile, the IMF has predicted slower global economic growth in 2012 and 2013, of 3.5 percent and 3.9 percent respectively.
In the second quarter this year, China's GDP growth slowed to 7.6 percent year on year, down from 8.1 percent growth in the first quarter.
The IMF said that the slowdown in China and in other major developing markets is being driven both by external and internal factors. In its report, the IMF stated, "In the medium term, there are tail risks of a hard landing in China, where investment spending could slow more sharply given overcapacity in a number of sectors."