China: Growth target lowered from “about 7%” to 6.5-7% - TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Research Team at TDS, lists down the key takeaways from the National Peoples’ Congress held over the weekend.

    Key Quotes

    1) Growth target was lowered from “about 7%” to 6.5-7% (maintain 2016-2020 growth target at 6.5%) and the new urban jobs target at 10mn was in line with expectations;

    2) Fiscal easing - the government’s plan is to increase infrastructure and social spending, pushing the budget deficit to 3% of GDP (some were expecting more, closer to 4%);

    3) Pursue SOE reform by addressing zombie firms through mergers, bankruptcies and debt deals;

    4) keep monetary policy accommodative (use ’’full range of monetary policy tools’), the government targeting a 13% growth rate for M2 and Total Social Financing;

    5) Tax and credit policies to be aimed at supporting ‘reasonable’ housing demand;

    6) Keep yuan rate at a “reasonably balanced” level. Is that ~6.50?”
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