In a report, the Fund said it expected China’s economic growth to slow towards 5.8% by 2021.
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Overseas demand cut 0.3 percentage points from the GDP, cutting into growth for only the first time in the past four quarters and adding to the pain that weak global demand has inflicted on an economy that is export reliant. Government economists will also release latest trade data on Thursday before closing out the week with the All Industry Activity Index, a key gauge of overall production.
The Japanese economy slowed to a crawl in the second quarter, bringing the threat of recession back to the forefront.
Japan’s economy almost stalled in Q2 amid falling exports and weak corporate investment, adding pressure on Shinzo Abe to ramp up efforts to revive growth.
Japan, the world’s third-largest economy expanded by an annualized 0.2 percent in the second quarter, less than a median market forecast for a 0.7 percent increase and a marked slowdown from a revised 2 percent increase in January to March.
Deflation intensified in June, with headline CPI falling for a fourth consecutive month.
The figures come after the government launched a massive new stimulus package worth 28 trillion yen ($265bn; £200bn). That hurts exporters by making goods produced in Japan more expensive overseas.
Japanese businesses are suffering from the country’s strengthening currency, which has surged more than 18% against the dollar this year.
Policy makers are struggling to find a strategy to produce consistent growth, with the economy oscillating between slight expansion and contraction.
It also plans a “comprehensive assessment” of the effect of the bank’s monetary easing on the economy, citing “considerable uncertainty” over the outlook for prices and global markets.
In February, the central bank began charging retail banks on excess reserves, implementing a negative interest policy in its quest to get lenders to put money to use.
But lenders have complained they are eating into their financial results.
“The main aim of Abenomics was to turn around the economy in a fundamental sense, so basically reform the traditional blockages to growth, and on that front we’ve seen very little progress”, Marcel Thieliant, Japan economist at Capital Economics told the BBC.
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Tokyo stocks fell on Monday after hitting their highest levels for over two months in the previous session, as figures showed Japan’s economy stalled in the second quarter. This adds to pressure on the Bank of Japan to take further action to stimulate stagnating corporate spending.
