Chinese Policymakers to Boost Measures to Meet 2024 Growth Target Amid Deflationary Pressures
China's economy is facing challenges as growth slows, prompting expectations for more stimulus. President Xi Jinping is pushing to achieve the country's annual economic goals, including a 5% GDP growth target for 2024. Policymakers are focusing on boosting demand to combat persistent deflationary pressures.
With a reliance on infrastructure spending and concerns about debt risks, China is considering strengthening fiscal policy and adjusting monetary policy to support growth. The recent interest rate cut by the Federal Reserve will provide room for the People's Bank of China to take similar actions.
Additional measures may include increased spending by local governments and the central government, as well as efforts to stimulate household demand and public consumption. Despite the need for stimulus, policymakers are cautious about forceful actions in the near term.
Analysts predict that China will implement fiscal expansion to support social security programs and boost consumption. However, concerns remain about deflationary pressures and the ability to drive a significant resurgence in consumption.
Overall, China's growth target for 2024 is at risk, with several global brokerages lowering their forecasts below the target. While stimulus measures are expected, the effectiveness of these actions in addressing deflationary pressures and boosting growth remains uncertain.