PBOC rate cut needed to boost demand, ensure 5% growth – Chinese think tank
According to an influential Chinese think tank called China Finance 40 Forum, the People’s Bank of China (PBOC) needs to cut the interest rates and boost infrastructure investment to achieve its 5% growth target in 2022.
Key takeaways
“Policymakers should use interest rate policy tools earlier rather than later and alleviate the private sector’s debt burdens with lower rates.”
“Lower rates can also enhance asset valuations in the private sector and expand investment and consumption levels.”
“A target of 5% economic growth in 2022 is not high considering the negative impact of virus controls on economic activities.”
“However, even achieving 5% would be a challenge if domestic demand doesn’t improve.”
Related reads
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
