China GDP forecasts raised, PBOC to keep policy on hold
Economists weigh in after 1H growth beats estimates
A median of 57 economists surveyed by Bloomberg expect China’s economy to expand by 6.7% in the third quarter and 6.6% in the fourth, both numbers up 0.1% from forecasts a month ago.
The improved outlook will give the government more leeway in pushing ahead with their deleveraging campaign, an effort that has been given top priority. Observers had been unsure of how China’s economy would respond to the crackdown on excessive borrowing, and whether Beijing would even continue, but the stronger than expected performance has put those questions to rest for the time being.
The economists surveyed also expect the People’s Bank of China to keep policy on hold, leaving the benchmark interest rate and bank reserve ratio unchanged for the rest of the year. M2 money supply is expected to rise 9.8%, versus the previous forecast of 10.1%.