WASHINGTON, Jan. 8 (Xinhua) -- The Chinese economy is projected to expand by 7.9 percent in 2021 following 1.9 percent growth in 2020, as domestic COVID-19 outbreaks remain under control and private consumption is expected to pick up in the year, the International Monetary Fund (IMF) said Friday.

"The Chinese economy continues its fast recovery from the pandemic, helped by a strong containment effort and swift policy actions to mitigate the impact of the crisis," the executive board of the IMF said in a statement after concluding the annual Article IV review of the Chinese economy.

"Policymakers have provided financial relief and fiscal support to protect the most-affected firms while safeguarding financial stability," the IMF's executive board said, adding macroeconomic and financial policies have supported the economic recovery.

IMF executive directors called for a continuation of the "moderately supportive" fiscal and monetary policies until China's recovery is on solid ground.

The directors also welcomed continued progress on China's structural reforms, particularly in further opening up of the financial sector and improving labor mobility through "hukou reforms."

"Structural reform will be key to boosting potential growth, reduce external imbalances, and build a more resilient, green, and inclusive economy," they said.

"We hope and we are assuming under our baseline forecast that the main driver of (China's economic) growth this year will be private consumption," Helge Berger, the IMF's China mission chief and assistant director in the Asia and Pacific Department, told Xinhua on Friday at a press briefing, expecting private consumption to pick up in 2021 as the pandemic recedes.

"The way we assume this will happen is that it will be strong enough to compensate for a smaller role of investment and for a gradual withdraw of public support," Berger said, adding fiscal and monetary policy needs to continue supporting growth and authorities should not withdraw policy support prematurely.

"It will be also crucial to adjust the composition of fiscal policy support in a way that facilitates consumption, and this can be done by strengthening social safety nets," he said.

Berger also noted that it will be harder for China to tap into external productivity improvements through normal means of trade and foreign direct investment, as external environment has become a bit difficult in recent years.

The IMF official suggested China could push forward real sector reforms, such as reforms to ensure a level playing field between private firms and state-owned firms, to boost productivity and potential growth.

"What you can do and what you should be doing is you should be looking at ways of improving sources of growth that are within the country," he said.

Jin Zhongxia, IMF executive director for China, said China will continue to expand global economic linkages and cooperation to enhance its economic efficiency and resilience, citing the recent signing of the Regional Comprehensive Economic Partnership free trade agreement and the completion of bilateral investment agreement negotiations with the European Union.

"As the Chinese economy continues to steadily recover from the COVID-19 shock, the authorities remain committed to pursuing prudent policies that will foster sustainable and high-quality growth going forward," Jin said.

In its latest Global Economic Prospects released Tuesday, the World Bank also expected China's economy to expand by 7.9 percent in 2021.

China's recovery so far has been proceeding "more rapidly than expected," and also supported by stronger-than-expected release of pent-up demand, said Ayhan Kose, World Bank acting vice president for Equitable Growth and Financial Institutions .

In its Economic Outlook report released in December, the Organization for Economic Co-operation and Development predicted that China's growth would speed up to 8 percent in 2021, accounting for over one-third of global gross domestic product growth for the year. Enditem

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