Policymakers still have plenty of ammunition

Growth looks likely to have slowed sharply in Q1, in spite of recent cuts to the required reserve ratio and benchmark interest rates. This has raised concerns that policymakers are now struggling to offset downward pressure on the economy and may fail to meet their annual growth target for this year. We’re more optimistic the target will be met as we think there is a lot more that policymakers can, and likely will, do to shore up activity in order to prevent growth from slipping further.