The International Monetary Fund reduced its economic outlook for China to 4.4% for this year from 4.5% in its January estimate as international markets continue to grapple with the impact of the Middle East conflict, according to a Tuesday press release.

The new outlook is lower than Beijing's gross domestic product growth target of between 4.5% and 5% but higher than the agency's October 2025 projection.

For 2027, the IMF predicts China's GDP growth will further slow down to 4%.

The agency lowered the global economic growth forecast to 3.1% for the year and 3.2% in 2027, while global headline inflation is expected to moderately climb this year.

"A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding artificial‑intelligence‑driven productivity, or renewed trade tensions could significantly weaken growth and destabilize financial markets," the IMF said.