China's debt-to-GDP ratio reached 366 % in Q1 2024, setting a new record. The ratio has more than doubled since 2008. China is having difficulty reaching its 5% GDP growth target.
According to China National Bureau of Statistics data, the economy grew by 4.6% in the July-September quarter, slightly higher than expectations. However, compared to 4.7% growth in the previous quarter, the growth rate slowed down. The growth rate was 4.8% in the first three quarters.
Factory production increased by 5.8%, while retail sales grew by 3.3%. Property investment decreased by 10.1% and new home sales decreased by 22.7%. This weakness is causing the economy to remain below the 5% target.
Economists state that if the growth rate continues in this way, it will be difficult to reach the official target. The government announced new measures to lend 4 trillion yuan ($562 billion) to banks. In addition, President Xi Jinping emphasised for the 2nd time this month that efforts should be increased for economic growth.
Goldman Sachs and Citigroup revised their growth forecasts for 2024 to 4.7%. As the crisis deepened, the central government announced a comprehensive economic package and stock markets increased by up to 35%.
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