IMF Boosts China 2026 GDP Forecast to 4.5% as US-China Trade Truce Eases Pressure

A handshake in November is finally paying dividends in January. The International Monetary Fund (IMF) has raised its 2026 economic growth forecasts for both China and the United States by 0.3 percentage points, signaling that the cooling of trade tensions is revitalizing the world's two largest economies.

Trade Truce and Lower Tariffs Fueling IMF China 2026 GDP Forecast

According to the latest World Economic Outlook released on Monday, China's economy is now expected to expand by 4.5% in 2026. This revision follows a landmark agreement in November 2025 that scaled back the aggressive import tariffs previously imposed under Donald Trump's administration. In exchange, Beijing agreed to ease export controls on rare earth metals, which are vital for the global high-tech and automotive sectors.

Domestic Stimulus and Global Upgrades

The outlook isn't just about trade; China's internal strategy is playing a huge role. A stimulus package announced in December 2025 aimed at boosting household spending has provided a necessary cushion. Meanwhile, the US growth estimate was bumped to 2.4% for 2026. Globally, the IMF projects a 3.3% expansion, though China's forecast still trails the 5% growth reported for 2025 by the National Bureau of Statistics.