China’s Q4 GDP growth seen hitting 1-1/2-year low, raising heat on policymakers
2 min readChina’s economy is likely to grow at the slowest pace in 1-1 / 2 years in the fourth quarter, dragged by weaker demand due to a decrease in property, curb debt and strict Covid-19 steps, collecting heat on policy makers to launch more step .
Data on Monday is expected to show gross domestic product (GDP) grow 3.6% in October-December from the previous year – the weakest step since the second quarter of 2020 and slowed from 4.9% in the third quarter, a Reuters poll showed.
Quarterly, growth is expected to rise to 1.1% in the fourth quarter of 0.2% in July-September.
For 2021, GDP is likely to expand 8.0%, which will be the highest annual growth in a decade, partly due to a low base by 2020, when the economy jerks by Covid-19 and tight locking.
The government will release GDP data, along with December activity data, on Monday at 02.00 GMT.
The second largest economy in the world, which was cooled over the past year, faced double headwinds in 2022, including continuous property weakness and new challenges from recent local spread from an omicron variant that was very contagious.
Exports, which are one of the few fields of strength in 2021, are also expected to slow down, while the government is seen continuing its explanation on industrial emissions.
Policy makers have vowed to lead a sharper slowdown, ahead of the key Communist Party Congress later this year.
The central bank is set to reveal more steps of easing, although it will likely support injections more money to the economy than cutting interest rates is too aggressive, people said in policies and economists. Read more
Analysts surveyed by Reuters expect the central bank to provide simpler easing measures, including cutting the ratio of bank reserve requirements, a one-year loan rate (LPR) – benchmark loan level.
Anz analyst said in the note that they saw the possibility that the central bank would cut the level of medium-term loan facilities (MLF) on Monday.
Policy makers also promised to increase fiscal support for the economy, accelerate the issuance of local government special bonds to spur infrastructure investment and plan more tax deductions.
“We may see a greater effect of monetary and fiscal easing only in the second half of 2022 due to the delay in the transmission of this policy,” said analyst at Natixis in a note.
“Recent monetary easing and stabilization of PMI (factory activity) has indicated such direction, but more effort is needed to increase fixed asset investment.”
Growth is likely to slow down to 5.2% by 2022, according to the poll.
About Author
