China sets GDP target of around 5% for 2023

Published March 5th, 2023 - 10:40 GMT
China GDP growth set at 5%
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ALBAWABA — China set gross domestic growth target of 5 percent for 2023, according to Premier Li Keqiang’s government work report released Sunday.


"China's economy is staging a steady recovery and demonstrating vast potential and momentum for further growth," Li said at the opening of the National People’s Congress, part of the annual “Two Sessions” parliamentary meeting.


The work report set a goal of 3 percent for the consumer price index, and a 5.5 percent unemployment rate for people in cities — with the creation of around 12 million new urban jobs, up from over 11 million last year.


The deficit-to-GDP ratio is expected to increase to 3 percent from 2.8 percent last year, the report said, calling for implementing “prudent monetary policy” in a “targeted” way.


After setting one of the lowest growth targets in decades, Li warned that "uncertainties in the external environment are on the rise", noting high global inflation.


"External attempts to suppress and contain China are escalating," the premier said.


"The growth target came in at the low end of the market expectation," Zhiwei Zhang, president and chief economist at Pinpoint Asset Management in Hong Kong, told Agence France-Presse. "But it should be taken as a floor of growth the government is willing to tolerate. Indeed, given the very low base of economic activities last year, it is unlikely to see growth drop below 5 percent."


"Given the complete reshuffling of the government, a key issue to watch in the next few months is how the new leaders will boost private sector confidence," Zhang told Bloomberg. "This is more important than the fiscal and monetary policies, in my view."


As the economy strained under the impact of strict COVID-19 containment policies and a property crisis, China posted just 3 percent growth last year.


Official data released Wednesday showed how quickly economic activity has bounced back as China’s factories had their best month in nearly 11 years in February, after the country abruptly ended its zero-Covid policy in December.


The services and construction industries also had their best performance in two years. 



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