China will slow down before stabilizing

China’s economic growth is likely to slow to 5.2% in 2022, before leveling off in 2023, a Reuters survey showed, as the central bank moves forward with a cycle of easing monetary policy to avoid further lag. pronounced activity.

Estimated growth for 2022 would be lower than the 5.5% that analysts projected in a Reuters poll in October, underscoring headwinds for the world’s second-largest economy due to housing crisis, debt crackdown, tough policies against pollution and a strict program to stop the spread of Covid-19, aspects that have hit consumption.

Gross domestic product (GDP) likely expanded 8.0% in 2021, according to the forecasts of 62 economists polled by Reuters, down from 8.2% calculated in the October survey, but it would still be the largest annual growth raised in a decade.

Analysts attribute the strong expansion in 2021 in part to the low base of comparison in 2020, when the economy was hit by Covid-19.

But momentum has cooled noticeably over the course of the past year. GDP in the fourth quarter likely grew 3.6% from a year earlier, which would be the weakest pace since the second quarter of 2020, slowing from 4.9% in July-September, the survey showed.

The Chinese government is due to release 2021 GDP data, along with activity data for December, on January 17.

Chinese leaders have pledged more support for the slowing economy, which faces a new challenge from the spread of the Omicron variant.

With the new year expected to start on a weak note, the People’s Bank of China (PBOC) is set to unveil more easing measures, though it will likely favor pumping more cash into the economy rather than cutting interest rates. too aggressively, experts and economists said.

Analysts expect the PBOC to cut rates by 5 basis points in the first quarter.

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