over 1 year ago • 1 min
China just announced a $146-billion economic rescue package, focused on infrastructure spending, and, frankly, no one seems impressed.
Typically, announcements about new economic “stimulus” are welcomed by investors and economists alike, but stock and bond markets barely took notice of this one, and economists were quick to shrug it off.
In essence, economists don’t think this package, which includes money that went unused in previous packages, will do enough to fix the damage from repeated Covid lockdowns and a new property market slump. What’s more, given that the government has said it won’t “flood the economy with excessive stimulus”, people are getting the sense that this might be all there is, at least for a while. That’s likely to have an impact on consumer and business confidence, denting how much they’re willing to spend and invest, and in turn making the prospects for economic growth even tougher.
China’s targeting 5.5% annual economic growth, and while it’s admitted the economy probably won’t achieve that this year, how much it falls short is up for debate. Goldman Sachs economists, for instance, are projecting a 3% growth rate, while economists on average are forecasting 3.7%. And no one’s likely to revise those figures higher right now…
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.