Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China's growth seen slowing to 5.5% in 2022, modest policy easing expected: Reuters poll

EconomyOct 13, 2021 05:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: People wearing face masks walk on a street in Shanghai, following the coronavirus disease (COVID-19) outbreak, China July 16, 2020. REUTERS/Aly Song/Files

By Kevin Yao

BEIJING (Reuters) - China's economic growth is likely to slow to 5.5% in 2022 from an expected expansion of 8.2% this year, a Reuters poll showed, but the central bank could remain cautious about monetary easing due to worries over high debt and property risks.

Gross domestic product (GDP) in the third quarter likely grew 5.2% from a year earlier, slowing from 7.9% in April-June, as power shortages and supply bottlenecks hurt factories while sporadic COVID-19 outbreaks weighed on consumption, according to the median forecasts of 56 economists polled by Reuters.

That would be the weakest reading in a year, and slowing further from a record 18.3% expansion in the first quarter, when the year-on-year growth rate was heavily skewed by the COVID-induced slump in the first quarter of 2020.

"The downward pressure could persist for two to three quarters," said Wang Jun, chief economist at Zhongyuan Bank.

"We can see that policy easing has been very restrained. Large-scale policy easing in the fourth quarter is very unlikely."

The world's second-largest economy has rebounded from the pandemic but there are signs of a slowdown. Problems including falling factory activity, persistently soft consumption and a slowing property sector have dimmed China's economic outlook.

However, the country's export growth surprisingly accelerated in September, as still solid global demand offset some of the pressures on the economy.

The People's Bank of China last eased its requirements on how much cash banks should hold in mid-July, just before a surge in domestic COVID-19 cases.

On a quarterly basis, growth is forecast to ease to 0.5% in July-September from 1.3% in the second quarter, the poll showed.

Economists in the poll expected the economy to expand 8.2% this year, slower than an 8.6% rise in July's forecast but would still be the highest annual growth in a decade. The economy expanded 2.3% in pandemic-hit 2020.

The forecast on 2022 growth remained unchanged, at 5.5%.

China has set an annual GDP growth target at above 6% this year, below analysts' expectations, giving policymakers more room to cope with uncertainties.

MODEST POLICY EASING EXPECTED

Signs of further slowing in the economy could put pressure on the PBOC to ease policy, but analysts said concerns over debt and property bubble risks may delay any meaningful steps, analysts said. Consumer inflation remains benign but soaring producer prices could be a headache for the central bank, they said.

The PBOC is likely to keep banks' reserve requirement ratio (RRR) unchanged in the fourth quarter, before delivering another 50-basis points cut in the first quarter of 2022, according to the poll. The July poll predicated a cut in the fourth quarter.

Analysts expect China will keep its one-year loan prime rate (LPR) steady at 3.85% until June 2022. The LPR has remained unchanged since May 2020.

Meanwhile, local governments are quickening special bond issuance to spur infrastructure investment and support growth.

Data from the finance ministry showed local governments issued a net 1.84 trillion yuan ($285.6 billion) in special bonds in January-August, accounting for about half of the annual quota.

Consumer inflation will likely slow to 1.0% in 2021 from 2.5% in 2020, but it could pick up to 2.3% in 2022, according to

the poll.

(For other stories from the Reuters global economic poll)

($1 = 6.4435 Chinese yuan)

(Polling by Md. Manzer Hussain and Devayani Sathyan in Bengaluru and Jing Wang in Shangha; Reporting by Kevin Yao; Editing by Jacqueline Wong)

China's growth seen slowing to 5.5% in 2022, modest policy easing expected: Reuters poll
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email