(Bloomberg) -- Risks to the economy from the meltdown of China Evergrande Group are “contained” for now, according to a senior official with the International Monetary Fund.
“People understand that the government has the tools to contain the risks going forward,” Helge Berger, head of the fund's China mission, said on Bloomberg Television. Risks in the property sector are contained to the sector at the moment, but authorities should keep monitoring in case they escalate, he said.
China's property sector is highly leveraged, and the authorities' efforts to deleverage are welcome, Berger said, but they need to be careful not to go too fast or too slow.
Developer China Evergrande Group's debt crisis has intensified a downturn in the country's real-estate sector and weighed on the economic outlook. China's property and construction industries contracted in the third quarter for the first time since the start of the pandemic.
The IMF cut its growth forecast for China and the Asia-Pacific region this year on a surge of the delta variant and lagging vaccinations. China's forecast was trimmed to 8% from 8.4% to reflect ongoing outbreaks of the virus, fiscal policy tightening and stresses in the property sector.
©2021 Bloomberg L.P.
With assistance from Bloomberg
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
