The People’s Bank of China (PBOC), China Securities Regulatory Commission (CSRC) and National Financial Regulatory Administration (NFRA) announced a slew of stimulus measures in a joint briefing on Tue (24 Sep). The PBOC doubled down on its monetary policy easing by cutting both the interest rates and banks’ reserve requirement ratio (RRR), UOB Group economist Ho Woei Chen notes.

Growth to moderate further to 4.6% in 2025

“China announced a slew of stimulus measures to boost its economy on Tue (24 Sep). The PBOC doubled down on its monetary policy easing by cutting both the 7-day reverse repo rate and banks’ reserve requirement ratio (RRR).”

“China’s latest measures including for the property market were broadly in line with what analysts have called for, though the magnitude of monetary policy easing surpassed expectations. Taking into consideration of the 20bps cut to the 7-day reverse repo rate announced today, we expect the 1Y and 5Y LPR to be lowered to 3.15% and 3.65% respectively by end-2024.”

“The latest set of stimulus measures are likely in response to further deterioration in China’s Aug macroeconomic data but may not be sufficient to reverse the downturn in China’s property market. We keep our GDP growth forecast for China at 4.8% for 2H24 with full-year GDP at 4.9%, after accounting for 1H24 growth of 5.0%. Thereafter, we expect growth to moderate further to 4.6% in 2025.