IMF projects China's economy to expand 8.1% in 2021

China's economy is projected to expand by 8.1 percent in 2021, the International Monetary Fund (IMF) said on Tuesday.

The forecast is 0.2 percentage point above its estimate half a month ago, according to the organization's latest update to its World Economic Outlook. It is also projected that the global economy will grow by 5.5 percent in 2021.

China returned to its pre-pandemic projected level in the fourth quarter of 2020, ahead of all large economies, said IMF Chief Economist Gita Gopinath at a virtual press briefing on Tuesday.

The upgrade for 2021 reflects the positive effects of the onset of vaccinations in some countries, additional policy support at the end of 2020 in economies such as the United States and Japan, she added.

The world's second-largest economy's gross domestic product increased by 6.5 percent in the fourth quarter of 2020, according to China's statistics department.

The fourth-quarter growth brought the country's full-year expansion to 2.3 percent, which indicates that China led major economies in annual positive growth in 2020, while many others continue to grapple with the pandemic.

However, the recovery of consumption lagged behind, and the recent outbreak of COVID-19 cases in northern Chinese cities has raised public concerns on the overall economic recovery. The retail sales of consumer goods in 2020 went down by 3.9 percent year on year, marking the first contraction in retail sales since 1968, according to official data.

On Tuesday, the governor of the People's Bank of China Yi Gang said China's monetary policy would stay steady in support of economic growth, adding the central bank "will not exit from supporting policy prematurely."

China's 2021 economic growth will more or less reside in the pre-COVID normal growth range, the governor estimated.

Yi said China's macro policies would focus on maximizing employment, as a stable job market will help to drive consumption.