Manila: China`s economy will likely grow faster than previously thought in 2015, the International Monetary Fund said on Wednesday, downplaying the risks of the cooling property market in the world`s second-largest economy.
Economic growth in China will likely be "well above" 7 percent next year, Changyong Rhee, director of the Asia and Pacific department at the IMF, told a briefing in Manila.
His remarks suggested the global lender`s will upgrade its growth forecast for the country due next month from the current 7.1 percent estimate it made in July.
The IMF has a 7.4 percent growth forecast for China for 2014, slightly below the government`s official target of around 7.5 percent.
"We expect they have many tools to maintain the growth rate well above 7 percent next year," Rhee said.
Many economists see the rapidly slowing property market as the biggest risk facing China`s economy. Home prices, sales and new construction are all falling, and increasingly dragging on related sectors from home appliances to glass, steel and cement.
Analysts believe Beijing will roll out further stimulus measures in coming months to avert a deeper economic slowdown, including more help for would-be home buyers.
However, Rhee said the IMF does not expect China`s cooling property market to become a serious problem, saying it sees "a gradual adjustment" rather than a hard landing.
"Evidence shows there will be a gradual adjustment in real estate market but we have to watch if that baseline scenario will hold," Rhee said.
A slowing Chinese economy should not be looked at as a "pure risk" as it gives other countries in Asia a better chance at competiting with Beijing and attracting foreign direct investments, Rhee added.
Growth in Asia will likely remain robust, Rhee said, putting countries in the region in a better position to withstand the impact of higher interest rates in the United States in terms of capital outflows and market volatility.
"We have to be prepared, but the impact on Asian economies will be much more minimal compared with its possible impact on other regions. We cannot be complacent but I think Asian countries are well prepared," Rhee said.
The Philippines is expected to sustain growth at above 6 percent for this year and next, Rhee said, but he encouraged the government to speed up structural reforms to address issues such as income inequality.
Rhee said the Philippines could afford to have a slightly higher budget deficit than its target of 2 percent of gross domestic product this year until 2016 so it can increase spending on critical infrastructure.
Manila has a 6.5-7.5 percent economic growth target this year and a 7-8 percent goal next year.
