The GDP target announced for 2025 suggests that policymakers are hoping to achieve steady growth this year, but we don’t think that the policy agenda set out today at the National People’s Congress will prevent a slowdown. While fiscal support has been stepped up, the scale of easing is smaller than we had expected, and modest in comparison to previous easing cycles. And the lowering of the inflation target suggests monetary easing could also be less significant than we had expected. As a result, although the government’s growth target of “around 5%” may be met on paper, we think the economy’s actual growth will be much weaker.
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