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IMF urges China to increase spending amid fiscal cliff
The IMF calls for China to boost fiscal stimulus as its economy faces deflation, projecting growth to slow to 4.5% this year and 4% by 2027. Local government debt, including hidden liabilities, has risen to about 126.6% of GDP, while land-sale revenues have halved since 2021, cutting municipal spending. Beijing’s deficit target remains around 4% of GDP, but actual deficits could reach 9%. The fund recommends a medium‑term fiscal framework that expands spending short‑term and retracts support later to ensure debt sustainability.