[ad_1]
China’s Minister of Finance Lan Fo’an stated in a press briefing that the central government has the capacity to increase debt and the deficit. He mentioned that there is a significant room for a deficit increase, although specific policies are still being discussed. Economists have been advocating for additional fiscal support, with hopes for a major stimulus package announcement, but no concrete plans have been unveiled yet.

Lan hinted that more stimulus measures are in the pipeline and that changes to debt and deficit could be expected soon. The focus now shifts to evaluating the impact of these policies on the macro outlook. The finance ministry also outlined measures to address local government debt issues, stabilize the real estate market, and support employment.

Regarding real estate, the finance ministry plans to allow special bonds for land purchases by local governments and expand affordable housing subsidies to cover existing housing inventory. There is also consideration for reducing real estate-related taxes, although specific figures were not provided. The need for strengthening monetary and fiscal policy support was highlighted in a meeting led by Chinese President Xi Jinping in late September.

Analysts have projected varying amounts for fiscal stimulus, with estimates ranging from 2 trillion yuan to over 10 trillion yuan. The focus now is on how these funds will be utilized, whether to bolster struggling local government finances or to enhance consumption. China’s retail sales have seen modest growth, while the real estate sector continues to struggle.

With GDP growth at 5% in the first half of the year, concerns have risen about meeting the full-year target. All eyes are now on the upcoming release of third-quarter GDP data. Further details are anticipated to be announced at an upcoming parliamentary meeting, with the need to keep some reserves for unforeseen economic shocks.

[ad_2]
SOURCE