Chinese economists expect the gross domestic product of the country to grow 6.3 percent this year, which is 1 percentage point more than what the International Monetary Fund suggests.
Chief economists from major financial institutions believed that the central government’s supply-side reform and other measures will lessen headwinds and help to maintain a relatively strong growth rate, according to China Business Network’s monthly economic survey that 22 chief economists participated in. CBN is an affiliate of Yicai Global.
Almost all financial professionals who took part in the survey agreed that economic growth will slow down from the year before. They suggested that GDP rose 6.58 percent in 2018, which was more than 1 percentage point less than what they proposed at the end of the third quarter last year. The IMF placed its bet on 6.6 in January that year.
As long as the trade frictions between China and the US come to an end, and domestic demand stays stable, the GDP growth may reach 6.3 percent, said Zhu Baoliang from the State Information Center, adding that in reality, the figure may land in a territory between 6 percent and 6.3 percent.
The Chinese yuan will buy about USD6.94 mid-year, and USD6.90 at the end of this year, the economists predicted. The redback will maintain a relatively stable exchange rate against the US dollar, despite last year’s growing flexibility. Still, traders have not started to panic, according to the survey participants.
The yuan will face fewer depreciation pressures against the US dollar, while the dollar index may turn around in mid-2019, Pan Xiangdong from New Times Securities said.
The Chinese central bank is likely to exercise a more proactive fiscal policy, and ease its monetary policy this year, the group predicted.
The People’s Bank of China cut reserve requirement ratios for the country’s financial institutions on Jan 4., which is the first sign of a more relaxed monetary policy, JD Finance’s Shen Jianguang said, adding that PBOC may move on to slash interest rates. Shen supported the government’s idea of cutting taxes and fees, as Premier Li Keqiang said on the government’s website on Jan. 4.
Source: Yicai Global
