China’s GDP growth met official target, but underlying data is a mixed bag. Economists at Commerzbank analyze Yuan’s outlook.
GDP exceeded target, but challenges remained strong
The 2023 full-year GDP of 5.2% is faster than the official target of ‘around 5%’. However, this was boosted by the low base in 2022, with a growth rate of just 3% when the zero-Covid policy was still in place.
The underlying data suggest China’s economic challenges remain significant, notably the housing slump, debt clean-up of property developers and local governments, and weak private sector confidence.
To shore up growth this year, policymakers will likely continue with their somewhat more aggressive stimulus stance towards the end of last year compared to the start of 2023.
Since the start of the year, the PBoC has been setting daily USD-CNY fixings that were higher than what they were towards the end of last year. This suggests that the central bank is tolerating a slightly weaker Yuan and taking a more pro-growth stance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : FXStreet – https://www.fxstreet.com/news/pboc-is-tolerating-a-slightly-weaker-yuan-commerzbank-202401170901
