BEIJING: The International Monetary Fund on Tuesday raised its 2023 economic growth forecast for China, citing stronger consumption and recent policy measures announced by Beijing.

After a tough year for the world’s number-two economy, there have been flickers of life in recent weeks, with third-quarter expansion coming in more than expected.

The Fund said it saw gross domestic product expanding 5.4 percent this year, compared with a previous estimate of 5.0 percent, while it lifted its outlook 2024 to 4.6 percent from 4.2 percent.

Gita Gopinath, First Deputy Managing Director of the IMF, told a news conference in Beijing on Tuesday that the upgrade reflected “a strong post-reopening rebound in domestic demand, particularly consumption.”

The economy grew 4.9 percent in July-September, slower than the previous quarter but a lot better than expected and a little shy of the government’s goal of “around five percent” for the year — one of its lowest targets in years.

China’s economy expanded just 3.0 percent last year — well below the official target of 5.5 percent — as it was choked by draconian Covid-19 measures.

A string of below-par economic data in the first half — which came despite the lifting of zero-Covid curbs at the end of 2022 — led the government to unveil a number of targeted stimulus measures aimed at supporting key sectors, particularly the troubled property industry.

And in October Beijing said it would issue one trillion yuan ($137 billion) of sovereign bonds to boost infrastructure spending.

Gopinath said the new forecast were made “reflecting stronger than expected growth in the third quarter and the new policy support that was recently announced.”

But she warned that the Fund expected “weakness in the property sector to continue, and external demand to remain subdued.”

The country’s key real estate sector generally accounts for around a quarter of GDP, but the industry has lurched from one crisis to another in recent years, with major firms crippled by mountains of debt.