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BOC has stable outlook for GDP growth in 2019
Last Updated: 2018-11-29 09:19 | China Daily
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Bank of China Ltd forecast that gross domestic product in China will grow by 6.5 percent in 2019, 0.1 percentage point lower than the estimated full-year GDP growth this year.

"Faced with new economic challenges, Chinese authorities have taken a series of strong policy measures which will take effect gradually and will be favorable for steady economic growth next year," said the nation's fourth largest State-owned commercial lender by assets in a report released on Wednesday.

China has adopted a more vigorous fiscal policy and accelerated local government bond issuance. Next year, the country will speed up implementation of major projects according to the 13th Five-Year Plan (2016-20), use the funds raised through local government debt and public-private partnerships for these projects as soon as possible, and attract private investment in the projects.

The central and local governments will also take further steps to create a fair and competitive market environment, improve the quality of regulatory approval services, and reduce corporate taxes and fees, according to the report on China's economic and financial outlook in 2019.

A series of policies were launched to stabilize investment, which will take effect step by step. For example, the government has accelerated the approval of infrastructure projects, and infrastructure investment is expected to rebound gradually, as a major task of the supply-side reform is to improve weak links in the economy, said Zong Liang, chief researcher of the Institute of International Finance at Bank of China.

The bank also expects private sector investment to grow steadily or even faster after China's top leadership urged central and local governments, as well as financial institutions, to launch measures with the aim of supporting private companies. Access to financing will hopefully improve for private enterprises, especially micro and small businesses, Zong said.

It is estimated that total investment will increase by around 6 percent next year and that new yuan-denominated loans will hit around 16 trillion yuan ($2.3 trillion), up by more than 1 trillion yuan year-on-year, according to the report.

Wang Youxin, a researcher at BOC's Institute of International Finance, said China's cross-border capital flows are expected to remain relatively stable next year.

"The further opening up of the Chinese markets will attract more capital inflows,... and in addition to various monetary instruments, the introduction of the countercyclical factor to the central bank's formula determining the mid-point reference rate for the yuan against the US dollar will continue to stabilize the exchange rate," Wang said.

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BOC has stable outlook for GDP growth in 2019
Source:China Daily | 2018-11-29 09:19
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