UPDATE 1-IMF sees scope for growth from recalibration of China's zero-COVID policy

(Adds quotes, context)

By Andrea Shalal

WASHINGTON, Nov 30 (Reuters) - The International Monetary Fund sees scope for a further gradual, safe recalibration of China's zero-COVID policy that could allow economic growth in the country to pick up in 2023, an IMF spokesperson said on Wednesday.

China's strict containment measures in Shanghai and elsewhere dampened domestic economic activity in the world's second-largest economy earlier this year and spilled over to other countries through supply chain interruptions, the spokesperson said in response to a query from Reuters.

"The authorities have since made the containment policies nimbler and more targeted. There is scope for further gradual, safe recalibration of the COVID strategy," the spokesperson said.

Earlier on Wednesday, the Chinese cities of Guangzhou and Chongqing announced

an easing of COVID curbs

following clashes between demonstrators in southern Guangzhou and police amid a string of protests against the world's toughest coronavirus restrictions.

The demonstrations, which spread over the weekend to other cities including Shanghai and Beijing, marked a rare show of public defiance since President Xi Jinping came to power in 2012.

IMF Managing Director

Kristalina Georgieva

on Tuesday flagged a possible downgrade in the IMF's forecast for China's economic growth, citing ongoing COVID-19 pandemic and problems in China's real estate sector.

The IMF had forecast 3.2% growth in China's economy in 2022, improving to 4.4% in 2023, but the risks were now on the "downside," and a downgrade was possible, she said.

Any weakening of growth in China would have ramifications for the global economy, given the size of the Chinese economy, and the IMF is already expecting about a third of countries to be in recession in 2023.

The IMF spokesperson did not specifically address the protests, but said COVID and COVID-related restrictions were generally hard on people, and had been particularly challenging in China due to its zero-COVID policy.

Fresh outbreaks in China could weigh on activity in the near term, the IMF spokesperson warned, but recalibrated policies should allow economic growth in China to pick up next year under the baseline.

That in turn would support global growth in a difficult year, the IMF spokesperson said. (Reporting by Andrea Shalal, writing by Caitlin Webber; Editing by Doina Chiacu and Paul Simao)