MNI BRIEF: China Should Set A 5% Growth Target For 2024

China should set its economic growth target at 5% for 2024 to boost market confidence, though the GDP is estimated to print near 4.8%, according to a report released by a prominent think tank on Sunday.

The economy will likely further recover next year, as both the inventory cycle and balance sheet repair have begun to bottom out with narrowing declines in export and real-estate investment, according to the annual report by the China Macroeconomy Forum. While forecasting a 5.3% growth for this year, the growth rate may still find it hard to return to the pre-pandemic level in 2024, the report added.

Authorities should set the budget deficit-to-GDP ratio at 3.5% for 2024, while the People’s Bank of China should keep monetary policy prudent and loose with a focus on reducing the financing costs of financial institutions, the report said.

CPI, which still fell 0.2% y/y in October, may rebound to 1.5% in 2024, and the surveyed urban unemployment rate may stay about 5%, the report noted.