© Reuters. FILE PHOTO: An individual appears to be like in direction of cranes in entrance of the skyline of the Central Enterprise District (CBD) in Beijing, China, October 18, 2021. REUTERS/Thomas Peter

By Kevin Yao

BEIJING (Reuters) – China’s economic system seemingly grew on the slowest tempo in 1-1/2 years within the fourth quarter, dragged by weaker demand attributable to a property downturn, curbs on debt and strict COVID-19 measures, elevating warmth on policymakers to roll out extra easing steps.

Knowledge on Monday is predicted to point out gross home product (GDP) grew 3.6% in October-December from a yr earlier – the weakest tempo because the second quarter of 2020 and slowing from 4.9% within the third quarter, a Reuters ballot confirmed.

On a quarterly foundation, progress is forecast to rise to 1.1% within the fourth quarter from 0.2% in July-September.

For 2021, GDP seemingly expanded 8.0%, which might be the very best annual progress in a decade, partly as a result of low base set in 2020, when the economic system was jolted by COVID-19 and stringent lockdowns.

The federal government is because of launch the GDP information, together with December exercise information, on Monday at 0200 GMT.

The world’s second-largest economic system, which cooled over the course of final yr, faces a number of headwinds in 2022, together with persistent property weak spot and a recent problem from the current native unfold of the highly-contagious Omicron variant.

Exports, which have been one of many few areas of energy in 2021, are additionally anticipated to gradual, whereas the federal government is seen persevering with its clampdown on industrial emissions.

Policymakers have vowed to go off a sharper slowdown, forward of a key Communist Celebration Congress late this yr.

The central financial institution is ready to unveil extra easing steps, although it should seemingly favour injecting extra cash into the economic system reasonably than slicing rates of interest too aggressively, coverage insiders and economists stated.

Analysts polled by Reuters count on the central financial institution to ship extra modest easing steps, together with slicing banks’ reserve requirement ratios the one-year mortgage prime fee (LPR) – the benchmark lending fee.

Analysts at ANZ stated in a notice that they noticed a chance that the central financial institution will minimize the speed on its medium-term lending facility (MLF) on Monday.

Policymakers have additionally pledged to step up fiscal help for the economic system, rushing up native authorities particular bond issuance to spur infrastructure funding and planning extra tax cuts.

“We’d see a bigger impact of the financial and financial easing solely within the second half of 2022 as a result of transmission lags of those insurance policies,” analysts at Natixis stated in a notice.

“The current financial easing and the stabilization of PMI (manufacturing facility exercise) have indicated such a course, however extra efforts are wanted to spice up fastened asset funding.”

Development is prone to gradual to five.2% in 2022, in accordance with the ballot.

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