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Chinese government takes measures to boost the economy
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A series of measures taken by the Chinese Central Bank were announced this Tuesday (24) to achieve the bold target of 5% GDP (Gross Domestic Product) growth in 2024. The measures will focus mainly on the real estate sector.
Post-pandemic recovery
The real estate sector is one of the most important in China's GDP count, but the sector was deeply affected during the COVID-19 pandemic. The government is also concerned with reducing the high rates of unemployment among young people and the low consumption of the population.
The main measure taken by the authorities was to reduce the Banks' Mandatory Reserves, which refers to a minimum amount that they need to keep in their coffers. As this value decreases, the number of loans is expected to increase, increasing consumption and domestic investment. The Mandatory Reserve will be reduced to 0.5% of the percentage.
The Chinese economy is trying to recover from the pandemic (Photo: reproduction/STR/Getty Images Embed)
The interest rate on real estate loans and mortgages will also be lowered to stimulate the sector's recovery. Chinese authorities will also launch programs that aim to make it easier for the population to purchase their first and second homes.
Stock markets in Hong Kong, Shanghai and Shenzhen rose an average of 4% after the implementation of the Central Bank's strategies. It is not yet known whether values will remain high.
Economists do not believe the target will be achieved
According to expert economists, the measures taken by the Chinese government and the Central Bank will help boost the country's economy, but it will probably not be enough to reach the exorbitant target of 5% GDP growth.
“The measures announced today are far from being the mega-recovery plan”says Raymond Yeung, analyst at ANZ bank, a banking group in Australia and New Zealand.
Even so, the country remains confident, in addition to the attitudes already mentioned, The Central Bank also announced the creation of a fund with around 500 billion yuan (R$390 billion) that can be used to stabilize the market, buy shares and invest in economic growth.
Featured photo: Chinese economy (Reproduction/ Anthony Kwan/Getty Images Embed)
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Chinese government takes measures to boost the economy
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Chinese government takes measures to boost the economy