March 9, 2017 / 4:44 PM / 6 months ago

IMF says China's lower growth target is achievable

Shoppers ride on a travelator at a supermarket in Beijing, China, October 15, 2015. REUTERS/Kim Kyung-Hoon/File Photo

WASHINGTON (Reuters) - China’s new reduced economic growth target of 6.5 percent for this year looks achievable, an International Monetary Fund spokesman said on Thursday, adding that the Fund does not see an imminent threat to China’s exchange rate from capital outflows.

IMF spokesman Gerry Rice said China’s economic momentum should make its growth targets achievable, as they now match the current IMF estimates. China on Sunday reduced its GDP growth target for 2017 to about 6.5 percent from a range of 6.5 to 7 percent last year

“We continue to advises less focus on high GDP growth targets, and more focus on tackling excessive credit growth, hardening budget constraints on state-owned enterprises and boosting the social security system.” Rice said.

Asked about China’s capital outflow pressures, Rice said:

“I think the capital outflow would only become a concern if it would give rise to a disorderly adjustment in the exchange rate. And we don’t see such a concern warranted right now.”

China has tightened capital controls to stem outflows in recent months and has sold hundreds of billions of dollars in foreign exchange reserves to help prop up the yuan’s value.

Reporting by David Lawder; Editing by James Dalgleish

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