Coronavirus News Asia

China eliminates GDP target, eyes job creation

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Hong Kong: China’s annual parliament gathering kicked off in Beijing on Friday with Premier Li Keqiang’s government work report abandoning an annual growth target. It also left its fiscal deficit target open at over 3.6% of GDP, with an eye to issue more government bonds as the world’s second-largest economy grapples with the impact of the coronavirus pandemic.

This follows the 6.8% contraction in real GDP growth in the first quarter, which has made the finance ministry and central bank more proactive via policy support and policy flexibility to try to create 9 million urban jobs.

“It should be noted that we did not propose specific targets for the annual economic growth rate, mainly because the global epidemic situation and the economic and trade situation are highly uncertain, and China ’s development faces some unpredictable factors,” Li said in his opening remarks.

The premier announced an array of fiscal measures while warning about falling consumption, investment and exports, and risks around job creation and financials.

Key announcements

#        GDP growth target abandoned

#       Fiscal deficit target of over 3.6% of GDP (2019:2.8%)

#        Central govt special bonds issuance 1.0 trillion yuan

#        Local govt special bonds target 3.75 trillion yuan (US$526 billion)

#        CPI target of 3.5% (2019 around 3%)

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