As the Chinese leadership prepares to set the economic agenda for the year ahead, analysts expect Beijing to mostly maintain this year’s policy tone but say it could tolerate a slightly lower growth target.
“To address the demand slump, we expect Beijing to maintain its proactive fiscal policy stance, with a near-term priority of alleviating local governments’ fiscal difficulties,” said Lu Ting, chief China economist at Nomura, in a report on Thursday.
While supportive measures for the still declining property sector could be introduced, markets “may need to lower their expectations”, he added.
“Beijing has yet to find more effective solutions that can be executed decisively to address the causes of the property collapse since 2021.”
Analysts at ANZ Bank also anticipate a “more proactive” fiscal policy and a “moderately loose” monetary policy, in line with this year’s stance.