China set one of the lowest economic growth targets in decades of 5 percent for the year 2023, Premier Li Keqiang announced during China’s annual National People's Congress in Beijing.
This is lower than the average forecasts set by economists surveyed by Agence France-Presse who predicted at least 5.5 percent growth.
China set an economic growth target of around 5.5 percent for the last year but missed its targets with around 2.8 percent deficit.
This comes as the nation’s top leaders are trying to avoid large stimulus to boost recovery in a post-pandemic market that is weighed down by weak business confidence and uncertainty in the property market.
“Because the COVID
policy has been adjusted, there’s no urgency for them (China) to run another round of big economic stimulus,” Zhang Zhiwei, chief economist at Pinpoint Asset Management Ltd, said.
“Indeed, given the very low base of economic activities last year, it is unlikely to see growth drop below 5 percent,” Zhiwei added.
Keqiang said that Beijing would target a rise in its consumer price index of around 3 percent and warns of uncertainties in external factors.
“China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth,” said Keqiang during the congress.
The government has targeted adding 12 million new urban employment jobs for this year, up from last year's 11 million target.
Keqiang added that Beijing should give priority to recovery and expansion of consumption in addition to promoting employment of youth and college graduates.
The country will also boost its defense spending by 7.2 percent this year as well as aim for peaceful reunification with Taiwan.
Keqiang said that boosting domestic demand would be the government’s top priority this year, while imports and exports would steadily increase.
“China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth. Under the strong leadership of the Party Central Committee, we carried out the Covid
-19 response and pursued economic and social development in an effective and well-coordinated way,” Keqiang added.