Sunday, December 20, 2015

ecns [expanded by feedex.net]: Downward pressure to persist: NDRC

ecns [expanded by feedex.net]

ecns

Downward pressure to persist: NDRC
http://www.ecns.cn/business/2015/12-21/193174.shtml
Dec 21st 2015, 02:25




Further monetary policy easing needed in 2016


China's economy will continue to face relatively intense downward pressure and the speed of economic growth may slow further, the top economic planner said in a report that also urged further monetary easing, according to a report from the Economic Daily on Sunday.


In a working report, the National Development and Reform Commission (NDRC) said that investment growth could decline to about 9 percent in 2016, according to a summary of the report posted by domestic news portal 163.com on Sunday.


From January to November this year, fixed-assets investment growth was 10.2 percent year-on-year.


Investment growth in manufacturing could fall by 1.5 percentage points, and real estate investment might be flat and infrastructure investment growth could fall 2 percentage points in 2016, according to the report.


The NDRC also forecast single-digit growth in consumption because of a consistent decline of urban residents' income growth and other factors that affect consumers' confidence.


Meanwhile, exports in 2016 could be slightly higher than this year due to a rebound in new emerging economies and policies that could speed up export growth, the report said.


The NDRC report pointed out major challenges in the economy including sluggish investment, a weak market for manufactured products, intensifying unemployment pressure and increasing financial risks.


Though the economy will continue to face downward pressure, the NDRC said, with "active, strong" economic policies and fast implementation of economic reforms, China could maintain economic growth within an "appropriate operating range."


The NDRC recommended that the government pursue "active" fiscal policies including a larger deficit to support major projects and an increase in issues of central and local government bonds.


Moreover, the central government should further cut interest rates and banks' reserve requirement ratio to maintain liquidity, according to the NDRC.


The economic planner also noted that further yuan depreciation would be needed to boost exports.


The stock market should be stabilized and efforts should be made to avoid large capital outflows, the top economic planner also said.


Speeding up structural economic reforms, streamlining administrative powers and resolving the overcapacity issue should also be on the agenda for 2016, according to the NDRC.


China's top leaders on Friday started an annual meeting to map out economic and reform plans for 2016.


  




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