-- China’s latest economic data put the government’s growth goal of about 5% well within reach and lessened the likelihood for more stimulus before the end of 2023. But the ongoing housing crisis remains a serious drag, clouding the outlook for next year.
“Any policy support to be provided now doesn’t just impact on this year’s growth,” Ouyang said, adding that potential further easing in the near term will influence growth assessments through the first half of 2024.The biggest upside surprise in Wednesday’s data came from retail sales. The figures showed a recovery in spending on everything from restaurants and alcohol to cars last month as compared to 2022, when coronavirus restrictions were in force nationwide.
The world should also feel a boost as the two largest economies outperform expectations formed earlier this year. Xi emphasized global interconnection on Wednesday as he opened a forum in Beijing marking the 10th anniversary of the Belt and Road Initiative, China’s landmark infrastructure project. Households appear to be cautious about buying homes as an ongoing liquidity crunch among developers — symbolized by looming default at Country Garden Holdings Co., once China’s top developer — makes them worried about whether homes will be completed. Households are also pessimistic on property prices, and so are shifting their savings from housing into bank deposits.
China said last week it would consider revising a law allowing it to assign local government bond quotas mainly used for infrastructure investment in advance. Economists said that move gives Beijing flexibility to introduce further stimulus at the end of this year or early next.
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