The International Monetary Fund (IMF) has raised its forecast for the Chinese economy. A report released on Monday stated that China's economy is expected to grow by 6.5 percent during this year. This estimate is higher than previous estimates by 0.3 percent.

China recorded a 6.7 percent growth rate in 2016, in line with its target rate of 6.5 percent to 7 percent. However, the country's economic growth has also raised various risks including debt pileup and asset price inflation.

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"The growth rate in China was a bit stronger than expected, supported by continued policy stimulus," the IMF stated. The international agency downgraded its rating for India, partly due to the impact of demonetization.

China currently has its corporate debt at 169 percent of its GDP. This high level of debt has raised concerns about the stability of the economy. Various international financial institutions have issued a warning to the government to tame the rise of debt.

China is expected to focus on these issues in 2017. Authorities have set a slower growth target for the year at 6.5 percent. This is in line with the forecast provided by the IMF. The country is likely to boost the value of its currency and stabilize its real estate sector during the year.

The IMF also said that the China was the main growth driver of the global economy in 2016. The country is likely to see a mild slowdown in its economic growth in 2018 as the IMF has predicted six percent growth rate for the year. The global economy is expected to grow by 3.4 percent and 3.6 percent in 2017 and 2018 respectively.

TagsIMF, china, Economic Growth Rate