MNI BRIEF: China GDP Likely Over 5% In H2, Above 4.5% For 2022

China is likely to reach an over 5% GDP growth in the second half and the country should not pursue an overly high target on stimulus which will hurt long-term development, said advisors and former officials in a summit held by China Wealth Management 50 Forum on Saturday.

China could see an above 4.5% growth for the whole 2022 after its economy expands over 5% in Q3 and Q4, said former PBOC governor Dai Xianglong, suggesting the government fiscal deficit/ GDP ratio will rise next year, (See: MNI BRIEF:China Q2 GDP Surprisingly Slows To 0.4% On Covid Hit).

Chen Daofu, senior fellow at Development Research Center of the State Council, said China could focus on “stabilising the economy” in H2 rather than a potential overheated condition. Chen said the biggest issue now is weak demand from both investment and consumption. Wang Yiming, member of the PBOC monetary policy committee, said the recovery of demand is largely lagging behind production and the jump of product inventory will weigh on economic growth.