Outlook: Experts say further easing needed
In China, economic momentum accelerated in the first two months of the year with better-than-expected performance in both demand and supply, establishing a promising tone for a solid 2024.
Analysts expressed strong confidence that the country would meet its annual growth target of around 5%, while predicting a steady growth trajectory in the first quarter as stimulus measures gradually take effect.
Meanwhile, the two leaders warned that the outlook remains uncertain due to lingering challenges such as continued weakness in the real estate sector, structural constraints to growth and heightened uncertainty, and that achieving this will require strengthening confidence and increasing growth momentum. He stated that further policy relaxation and structural reforms are needed to reignite the economic crisis. Annual growth target.
“The economic performance in January-February has laid a solid foundation for this year’s development,” Liu Aihua, spokesperson for the National Bureau of Statistics, said at a press conference in Beijing on Monday.
Mr. Liu said he believed the country has the conditions and ability to achieve this year’s annual growth target, given solid economic fundamentals, strengthening recovery factors and effective policy measures.
Statistics released by NBS showed that China’s economic activity in January-February generally exceeded expectations.
The country’s industrial production increased by 7% year-on-year in the same period, following a 6.8% increase in December, and fixed asset investment increased by 4.2% in the same period (annual growth rate in 2023 is 3%).
Retail sales growth for the period was 5.5% year-on-year, slowing from 7.4% in December, but broadly in line with market expectations.
Zhou Maohua, a researcher at China Everbright Bank, said the better-than-expected numbers showed economic stability, adding that the country was expected to get off to a strong start in the first quarter.
Looking to the full year, he said China’s economic recovery is poised to further strengthen its momentum with further adjustments in macroeconomic policies, improvement in domestic demand and gradual stabilization of the real estate sector.
China’s real estate investment fell 9% year-on-year in the first two months of 2024, contracting from a 9.6% decline in 2023, according to NBS data.
Louise Lu, chief economist at British think tank Oxford Economics, said the real estate data was broadly in line with credit data published early last week, suggesting credit demand remained worryingly weak at the start of the year. He said that it shows.
“In particular, bank loans to households, especially real estate-related medium- to long-term loans, continue to be sluggish as the real estate sector struggles to find a floor and consumer sentiment remains depressed,” he said.
Lu also warned of the risk that positive early indicators could lead to policy complacency and delay decisive easing.
“After all, this year is still young, and local governments and the real estate sector are both bracing for a long and difficult credit cleansing process,” Lu added, adding that reaching the growth target of “around 5%” said further meaningful mitigation is needed.
Although China’s overall economy still faces downward pressure, Li Xuesong, director of the Institute of Quantitative Technology and Economics, Chinese Academy of Social Sciences, believes that favorable conditions outweigh unfavorable factors in China’s development, and the basic trend of long-term economic recovery is said that there is. Our positive outlook for this quarter remains unchanged.
“China has a solid foundation to pursue high-quality economic development, driven by the ongoing technological revolution, the country’s strong industrial base, and a super-large domestic market,” Li said.
Looking ahead, Lee said the country is likely to reach its high potential growth rate of about 4.5% annually until 2035.
In order to further pursue high-quality development, Mr. Li will take further measures to deepen reform and expand opening-up to address structural issues, such as promoting market-based factor allocation reform and expanding the opening up of the service sector. I asked for movement.
