China plans to introduce a large stimulus package for the economy

China is considering introducing a large stimulus package to support the economy.

Earlier, China decided to lower the short-term interest rate, and now plans to provide a wide range of incentives to support key sectors of the slowing economy. Experts note that the Chinese authorities are disappointed with the slow economic recovery after the introduction of zero tolerance for COVID-19.

The Government is currently making efforts to revive economic activity, while initial forecasts suggested a rapid recovery after the pandemic.

Yesterday, the People's Bank of China lowered its short-term interest rate from 2% to 1.9% and contributed 2 billion yuan ($280 million) to the country's banking system to increase liquidity in the economy.

The incentive package includes more than a dozen proposals, including the use of incentive measures to support demand and solve problems in the real estate market. In 2023, the country's economic activity declined significantly, and key sectors faced difficulties due to insufficient growth in consumer demand. In May, manufacturing activity in China declined, and home sales fell by 14.3%.

Despite this, in April, the head of the People's Bank of China Yi Gang expressed confidence that the country will be able to achieve its goal of GDP growth of 5% this year.