BOAO, China (Reuters) – A prolonged slowdown in China would have substantial global spillovers, IMF Managing Director Kristalina Georgieva said on Thursday, but added that Beijing has room to adjust policy to provide support.

The International Monetary Fund on Tuesday cut its growth forecast for China this year to 4.4%, well below Beijing’s target of around 5.5%, on the risks of widespread COVID-19 lockdowns and supply chain disruptions.

In a video speech to the annual Boao Forum for Asia, Georgieva said China’s actions to counter its economic slowdown are vital for the global recovery.

“Fortunately, China has policy space to provide macroeconomic policy support, including shifting the focus toward vulnerable households to strengthen consumption, which can also help support China’s climate goals by steering economic activity to lower-carbon sectors,” Georgieva added.

“Stronger policy efforts in the property sector can also help secure a balanced recovery.”

At the same venue, China’s President Xi Jinping said China’s economy is resilient and that its long-term trend had not changed.

In light of growing headwinds, foreign brokerages have also been slashing GDP forecasts for China, after weakness in March activity data raised outlook risks as the lockdown in the mega city of Shanghai drags on.

Barclays on Tuesday cut their already below-consensus forecast to 4.3%, from 4.5% previously, while BofA downgraded their forecast for this year to 4.2%, from 4.8% before.

Nomura on Thursday revised their forecast to 3.9% this year, from 4.3% previously, and second-quarter growth is expected to expand by a meagre 1.8%, according to their baseline estimates.

(Reporting by Kevin Yao and Stella Qiu; Editing by Jacqueline Wong; Editing by Shri Navaratnam)