Amid increasing tensions with the US, China is also holding a meeting of top leaders to focus on the economic system from 2021 to 2025. China’s effort is to reduce the risk with economic growth
There will be no change in China’s benchmark deposit rate until the end of 2021, it is stable from 2015 until the end of 2021 China can keep a one-year loan prime rate (LPR) at 3.85%
China’s economy may reach a 44-year low in 2020. However, in 2021 it will grow at a rate of 8.4%. While the impact of the Covid-19 on the economy will be seen in 2020, it is expected to return in 2021.
World’s second-largest economy
According to a Reuters survey, China is projected to grow at a rate of 2.1% in 2020, the world’s second-largest economy. This has been revealed in the survey conducted with 37 analysts. This will be lower than the 2.2% projected in July. However, it has also been said that only China will be the only economy in the world which will gain in 2020.
Speed can catch in third quarter
The recovery of China’s economy has picked up in the third quarter. Because the effect of the corona gradually decreased. However, it has been less than anticipated. The survey estimates that gross domestic product (GDP) may grow at a rate of 5.8% on an annual basis in the fourth quarter. It was 4.9% in July-September. Regarding China’s growth, the survey estimated that it will grow at 8.4% in 2021. However, the global economy will also recover during this period.
Export will be strong, domestic consumption will also be good
According to estimates, the fourth quarter could be good due to strong exports and domestic consumption and investment. Growth in the first half of the 2021 fiscal year is expected to be good. Amid increasing tensions with the US, China is also holding a meeting of top leaders to focus on the economic system during 2021 to 2025. China’s effort is to reduce the risk with economic growth. However, the debt is expected to grow temporarily this year.
There will be no change in LPR
Analysts predict that China could maintain a one-year loan prime rate (LPR) at the level of 3.85% by the end of 2021. China’s central bank has not changed this for the past 6 months. However, it has cut 46 bps (.46%) since August last year. The survey also estimates that there will be no change in the benchmark deposit rate by the end of 2021. People’s Bank of China has not made any changes since October 2015.
The Consumer Price Index (CPI) of China is projected to grow at a rate of 2.7% in 2020. It was increased at 2.9 percent in 2019. The CPI is projected to grow at a rate of 2.1 percent in 2021.