China needs to further tighten flow of credit - IMF deputy managing director

BEIJING, June 14 (Reuters) - China needs to further tighten the flow of credit in its economy and funnel lending into economic activities that support real growth, International Monetary Fund deputy managing direct David Lipton told reporters in Beijing on Wednesday.

The IMF on Wednesday raised its forecast for China's economic growth this year to 6.7 percent, citing "policy support, especially expansionary credit and public investment."

After years of reliance on debt-fueled stimulus to meet growth targets, early warning indicators of a financial crisis in China are flashing red, economists at Nomura said in a note this week, echoing the warnings of others such as the Bank for International Settlements (BIS).

(Reporting by Sue-Lin Wong; Editing by Kim Coghill)