A leading central government agency forecasts a modest slowdown in Chinese GDP growth in 2019.
Zhu Baoliang (祝宝良), chair and chief economist of the State Information Center Economic Forecasting Department, said to Securities Daily that he expects China’s GDP growth in 2018 to have reached around 6.6%, following Q4 growth of around 6.3%.
China’s GDP is expected by Zhu to grow roughly 6.2% in 2019 and around 6% in 2020.
Inflationary pressure remains modest, with the PPI tail expected to fall to around 1.0% in 2019 from 2.8% in 2018, and the CPI tail to hold steady at around 0.8%.
Zhou Rusheng (周如生), executive secretary of the Asia-Pacific International Financial Forum Committee (亚太国际金融论坛组委会), said Beijing will continue to keep pressure on the real estate market in 2019, as well as seek to expand the role of rental accommodation.
“Irrespective of whether we look at population factors, income factors, the credit environment or national policy, there will no longer be any conditions to support ongoing gains in real estate prices in future,” said Zhou. “Under these conditions, a change in expectations of housing price gains is only a matter of time.”
Zhou also said that given Beijing will continue to focus on financial risk prevention as well as current pressure on the renminbi, there is comparatively limited room for loosening of monetary policy, and the central government is more likely to pursue multiple cuts to required reserve ratios in order to prop up growth.
The Chinese government can be expected to further cut taxes and expand the deficit ratio, as well as lift quotas for the issuance of local government special bonds.