IMF cautions over China’s “dangerous” credit growth

Aug 16, 2017, 6:58 AM EDT
(Source: Rita Heine/flickr)
(Source: Rita Heine/flickr)

A new report by the International Monetary Fund has warned China that its credit-fuelled economic strategy is unsustainable and could be headed towards a financial turmoil.

The strongly-worded report stated that the boom in Chinese economy since 2012 is due to a jump in private sector debt and use of complex financial instruments, writes The Guardian.

The agency called for a decisive action to deflate the debt boom as it spelled out 43 pieces of evidence from previous credit booms stressing how a major economic slowdown may follow if the situation is not addressed, notes the BBC.