Focus on Supporting Domestic Demand and Stabilizing Growth and Prices
The PBOC stated it would support domestic demand expansion and stabilize economic growth and prices while avoiding "flood-like" stimulus. The central bank also pledged to improve social expectations and boost confidence, mainly focusing on stabilizing economic growth, employment, and prices.
Challenges Facing the World's Second-Largest Economy
The PBOC acknowledged that the external environment remains "severe and complex," and the basics of domestic economic recovery are "not solid." The report also mentioned that the property sector requires time to transition and that the pressure of balancing local government fiscal revenue and expenditure persists.
Stabilizing and Improving the Economy
According to the report, the PBOC will keep liquidity reasonably ample and maintain effective credit growth. As the problematic property sector has shown a tentative recovery, the PBOC stated that it will satisfy reasonable financing demand but will insist on not using real estate as a short-term means to stimulate the economy. Late on Friday, the PBOC and banking and insurance regulator issued a notice to encourage commercial banks to issue loans to purchase housing by rental housing groups.
Economic Team Reshuffle and 2023 Policies
Markets are anticipating a government reshuffle, especially of the economic team, and the announcement of economic targets and policies for 2023 during the annual parliamentary meeting on March 5. The world's second-largest economy is stabilizing and improving but still faces many challenges, according to Premier Li Keqiang at a cabinet meeting on Wednesday.