From deflation to high debt burden: Here's 5 things happening in Chinese economy
President Xi Jinping mulls over rare policy changes like increasing the budget deficit which was increased to its most substantial scale in three decades. The country introduced a sovereign debt package that signaled a departure from its conventional fiscal support framework. 1.
Deflationary Pressures- The deflation pressure of the country returned in October casting doubts over the economic recovery. Last month, consumer prices experienced a 0.2% decline following a period of close proximity to zero in the preceding two months, as indicated by data released on Thursday from the National Bureau of Statistics. Moreover, the price levels on the side of producers continued their decline for the 13th straight month as they dropped 2.6% during October.
“Combating persistent disinflation amid weak demand remains a challenge for Chinese policymakers," Bruce Pang, chief economist for Greater China at Jones Lang LaSalle Ltd told Bloomberg. “An appropriate policy mix and more supportive measures are needed to prevent the economy from a downward drift in inflation expectations that could threaten business confidence and household spending." 2. Better growth forecasts- Despite a slowdown, the future doesn't look very bleak for the Chinese economy as recently the International Monetary Fund (IMF) forecasted 5.4% growth in China's economy this year.
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