[ad_1]
Chinese policymakers are expected to ramp up measures to support the economy in achieving its 2024 growth target amidst challenging conditions, analysts and policy advisers suggest. Focusing on stimulating demand to combat deflationary pressures, authorities aim to sustain around 5% GDP growth despite recent economic slowdowns. Facing a complex economic environment with debt risks and weak demand, policymakers are advised to strengthen fiscal policies and adjust monetary measures to address deflationary trends effectively.

The recent interest rate cut by the Federal Reserve has created room for the People’s Bank of China (PBOC) to implement similar measures, including lowering Interest rates and reserve requirements. Additionally, increased government spending, particularly on infrastructure projects funded by local and central governments, is anticipated to boost economic growth. While a combination of fiscal and monetary stimulus is likely to be used, a stronger emphasis on supply-side reforms may limit forceful stimulus in the near future, according to experts.

China’s growth target of around 5% for 2024 faces challenges, with recent forecasts falling below expectations. Analysts predict the need for urgent stimulus measures to spur household demand and consumption. Measures such as fiscal expansion in social security spending could help increase public expenditure and reduce savings, thus promoting consumption. Despite expectations of a stimulus package contributing to GDP growth, concerns remain regarding job security and income, hindering a significant resurgence in consumption.

Persistent deflationary pressures, highlighted by a prolonged deflationary streak and negative GDP deflator, call for decisive action to counter these trends. While a sharp increase in consumption remains uncertain, analysts stress the importance of additional fiscal measures to alleviate local government debt pressures. Overall, the focus remains on implementing targeted policies to support economic growth and counter deflationary risks.

[ad_2]
SOURCE