ANZ Bank tips China growth trending lower to 6.8% in 2015

BEIJING - With China’s 12th National People’s Congress (NPC) to start tomorrow (March 5), ANZ Bank is tipping that Chinese authorities will lower the targets for GDP, inflation and M2 – and that fiscal deficits will be increased to hedge fiscal revenue shortfalls led by implementation of the new Budget law.

Structural reforms will be deepened, ANZ says, with financial, SOE and urbanisation reforms leading the way. China will put more efforts on ‘Road and Belt’ initiatives, with more highways, railway and air routes to be constructed and established, and Chinese regions to further integrate resources, policies and markets to connect with the outside world.
“Given that economic reforms and restructuring will be the top priority this year, there is limited upside to economic growth,” ANZ says. “We thus maintain our forecast that China’s GDP growth is likely to trend lower to 6.8% this year.
“As deflation risk is rising and the economy is slowing, we see room for further monetary policy easing and other support policies to spur growth. We see fixed asset investment remaining steady this year to support growth, as the Government will still invest intensively in infrastructure, healthcare, education and technology upgrading.”  www.live.anz.com (ATI).