China's parliamentary committees meet in the week ahead, beginning on Sunday in an event that will outline key government policies and targets. Chief
China’s parliamentary committees meet in the week ahead, beginning on Sunday in an event that will outline key government policies and targets. Chief among them will be a GDP growth estimate, which government advisors currently recommend at 4.5-5.5%. The consensus from economists is 4.9% but there’s some chatter about 6%.
The two swing factors are 1) pent up demand from the reopening 2) the damaged property sector.
The government is expected to widen its annual budget deficit to around 3% of gross domestic product this year and issue about 4 trillion yuan in special bonds to support investment spending, according to Reuters sources. Some of that is already priced into markets so risks could run both ways but I see more upside than downside, given China’s (recent) penchant for over-promising and due to the new leadership looking to solidify its authority.
Spots to watch will be Chinese equities, commodities and commodity currencies. AUD/USD showed some life on Friday but was unable to get above the weekly high.
AUDUSD daily
For more, here’s a factbox on the NPC.
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