China said to lower GDP growth target to 6%-6.5% in 2019: Sources
The country has been missing expectations for its economic data in recent months, which are easy tell-tale signs of sputtering growth conditions.
With a weaker global economic environment, the higher United States (US) tariffs on goods, and slackening local demand, China is said to be planning to curtail its economic growth target for this year from last year’s rough target of 6.5%, to a range between 6.0% and 6.5% for this year.
The proposed target is expected to be revealed in March this year, during the country’s annual parliamentary session, sources told Reuters.
The country has been missing expectations for its economic data in recent months, which are easy tell-tale signs of sputtering growth conditions. On Thursday, China’s consumer prices gained 1.9% while producer prices edged up a mere 0.9% in December, rising slower than economists’ expectations.
China’s retail sales in November rose by 8.1%, slower than the 8.8% increase experts had hoped for. Meanwhile, industrial output for the same month rose by 5.4%, weaker than the predicted growth of 5.9%.
Gross domestic product (GDP) data for 2018 which is slated to be revealed later this month is expected to show China’s growth at around 6.6% for the full year, a pace of growth the slowest since 1990.
Weaker China GDP growth not a surprise to experts
Global watchdogs have already been cautioning the US and China, the two countries embroiled in a massive trade spat on the negative spill over effects that could hurt both economies if they kept on fighting.
The International Monetary Fund had in October said that the US-China trade war is likely to hit China harder than the US, and shaved the growth prediction for China next year to 6.2%.
China and US are currently on a 90-day trade truce and have successfully completed their first round of negotiations this week. China has called the talks “successful”, “extensive”, and helpful in laying “the foundation for resolving issues.”
For the third quarter, China’s gross domestic product growth increased 6.5% on a year-on-year basis. The performance was slower than the second quarter, and the weakest pace since the first quarter of 2009.
Analysts at Standard Chartered predict for China’s fourth quarter GDP to come in at 6.3% due to weaker factory numbers, bringing total annual growth for last year to 6.6%, a step back from 2017’s 6.9%.
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