GDP Growth Expected to Fall, Yuan to Further Depreciate, Yicai Global's Chief Economists Report Says
Yicai Global
/SOURCE : Yicai
GDP Growth Expected to Fall, Yuan to Further Depreciate, Yicai Global's Chief Economists Report Says

(Yicai Global) Jan. 9 -- China's GDP growth in 2016 had an annualized rate of 6.7 percent in the first three quarters but economic growth this year will face greater pressure, with annual GDP growth expected to fall to 6.48 percent, Yicai Global's Chief Economists Survey found.

The Chief Economists Survey, conducted monthly by Yicai Global polls chief economists and several major domestic and foreign financial institutions to forecast the economic data of the previous month.

In this period, the 22 economists surveyed not only made their own forecasts of the previous December but also analyzed China's macroeconomic data for the coming year.

The average forecast for the annual growth of the Consumer Price Index in Dec. 2016 was 2.19 percent, down from the 2.3 percent in Nov. 2016 released by the National Bureau of Statistics. The annual CPI growth in 2017 was estimated at 2.27 percent, slightly higher than the average of two percent in 2016.

The yuan's exchange rate had big fluctuations in 2016. Economists surveyed this month believed that this year the yuan-dollar rate may continue to depreciate but less than it did last year, forecasting it to depreciate by 2.06 percent to 7.08 from the figure on Dec. 30, 2016.

The central parity of the yuan against the dollar was then 6.937 and this will continue to depreciate and is expected to weaken to 7.16 by the end of 2017.

In the context of economic growth pressures, economists predicted future monetary policy will remain stable, while the task of supporting economic growth will be undertaken by the more positive fiscal policy.

This year, the scale of new loans and social financing in China's banking industry will increase compared with last year. The M2 growth rate will drop to 11.16 percent, the interest rate is seen as less likely to change and the deposit reserve ratio may be lowered.

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