With a strong stimulus package and a contained virus, #China’s growth prospects for 2020 are not yet lost, said Yu Yongding via East Asia Forum:
eastasiaforum.org/2020/04/22/chi…
In real terms, China’s 2019 #GDP was 19.7 trillion RMB in 2019 Q1 and 69.45 trillion RMB in the remaining 3 quarters. Official figures place China’s GDP at 18.4 trillion RMB in 2020 Q1.China’s GDP grew 6.1% in 2019.
Assuming that China maintains a real growth rate of 6% in the remaining 3 quarters of 2020, the annual growth rate will be about 3.2%. But the #COVID19’s unpredictability makes any economic forecasts problematic. China also has to be vigilant against a resurgence of the virus.
Uncertainties aside, the main question is whether the Chinese government will implement expansionary macroeconomic policies. The most urgent priority is for the government to help those who lost their jobs.
The #PBOC has cut bank reserve requirements twice, lowered the #interestrate on medium-term lending facility loans twice and injected liquidity into financial institutions via reverse repos and relending to provide financial supports for businesses to withstand the shocks.
China's battle against #COVID19
is entering a new stage where the focus of macroeconomic policies should shift to the #demand side. It should launch a comprehensive stimulus package to boost economic growth, especially when there is ample room for expansionary #fiscalpolicy.
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