China’s economy outperformed the government’s expectations in the first half of this year.

The International Monetary Fund (IMF) and one of China’s leading domestic think tanks believe this momentum will continue for the rest of the year.

The Chinese Academy of Social Sciences (CASS) expects the economy to grow 6.8 percent and 6.7 percent respectively in the third and fourth quarters, according to their latest progress report.

Across the year, the institution predicts growth of 6.8 percent.

The forward-looking purchasing managers’ index (PMI) indicators have remained in expansion for close to a year, as investment in the country’s pillar manufacturing sector grew 5.5 percent, higher than the 3.4 percent seen last year.

And investment in strategic emerging industries grew 10.8 percent while that in services stayed above eight percent.

The leverage ratio of the central government stood at 15.7 percent, down 0.4 percentage point from last year, while that of the local governments went down 0.7 percentage point to 22 percent.

Even though the government’s explicit leverage ratio was heading down, the report still warned that the country needed to guard against the growth of hidden debt, as the leverage ratio among individuals and non-financial sectors was on the rise – 3.3 percentage point up in the first quarter of 2017 to 237.5 percent from the end of 2016.

Meanwhile, debt levels of state-owned enterprises remained high, accounting for 60 percent of total corporate debt, according to the report.

But experts believe that deleverage in the financial sector has achieved an initial success, and supported the real economy steadily.

Zhang Xiaojing, the deputy director of the National Finance and Development Laboratory at CASS, said the risk of leverage could be reducing to the lowest level through transferring leverage and correcting mismatches of leverage.