BOAO (China) – An extended slowdown in China will have significant global spillovers. However, Kristalina Georgieva, IMF Managing Director, stated that a prolonged slowdown would lead to a substantial reduction in China’s growth. She also said that Beijing still has the ability to change its policy and provide assistance.

Due to the risk of supply chain disruptions and widespread COVID-19 lockdowns in China, Tuesday’s International Monetary Fund (IMF) cut China’s annual growth forecast to 4.4%.

Georgieva stated that China must take steps to reverse its economic slowdown in video at the Boao Forum For Asia.

Georgieva said that China is able to offer macroeconomic support. This includes shifting the emphasis to vulnerable households in order to increase consumption. The latter can help China achieve its climate goals and steer economic activity towards lower-carbon areas.

Stronger policy actions in the sector of property can help to secure a more balanced recovery.”

China’s President Xi Jinping spoke at the same event, stating that China’s economic resilience is strong and that it has not altered its long-term trend.

Foreign brokerages are also reducing GDP forecasts for China in light of increasing headwinds. This is after weak March activity data has raised concerns about the outlook as the Shanghai lockdown drags on.

Barclays LON: (LON) cut Tuesday’s already-lower-than-consensus forecast from 4.5% to 4.3%. BofA, on the other hand, downgraded its forecast for this fiscal year from 4.8% to 4.2%.

Nomura updated their forecast on Thursday to 3.9% from 4.3% earlier. According to their baseline estimates, second quarter growth will be a paltry 1.8%.