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IMF cuts China growth forecast for 2013

FXstreet.com (Barcelona) - The International Monetary Fund trimmed its growth outlook for China for 2013 from 8% to 7.75% on Wednesday, due to a decline in global demand, which could adversely affect the economic situation in the country.

Deputy IMF managing director David Lipton commented on the decision during a press conference held in Beijing, saying that the quality of investments in China was a subject of concern, as credit had been growing very rapidly and that a risk existed that it would be used for investments which would not be beneficial for the country. David Lipton stressed that the ability to repay the loans was also uncertain.

That is why the IMF urged China to implement reforms in order to attain balanced growth: “They need continued liberalization and reduced government involvement in the economy, allowing a greater role for market forces," he said.

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