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.”
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