BEIJING, March 3 (Reuters) – China’s Premier Li Qiang is expected to announce the country’s main economic targets for 2026 at an annual parliamentary meeting which kicks off on March 5.
Here are the ones to watch.
GROWTH TARGET
Most analysts expect Beijing to lower its economic growth target to “4.5-5%,” the first downgrade in four years, as sustaining 5% growth has been increasingly challenging without aggressive stimulus.
Morgan Stanley economists are among the few who expect the target to remain unchanged at around 5%, saying policymakers would want to project confidence at the start of a new five-year policy cycle.
BUDGET DEFICIT
The budget deficit is expected to remain at 4% of gross domestic product (GDP), as Beijing vowed to adopt a “more proactive” fiscal policy this year, economists say.
Analysts expect fiscal spending to focus on infrastructure and industrial investment and technological breakthroughs. Some resources could be allocated towards boosting consumption, but it’s unclear how sizeable these measures could be.
SPECIAL GOVERNMENT DEBT
Goldman Sachs has forecast a 1.8 trillion yuan ($261.5 billion) special treasury bond quota and a 4.6 trillion yuan special local government bond quota for 2026.
Citi and the Economist Intelligence Unit expected central government issuance at 1.6 trillion yuan.
Last year, China set a 1.3 trillion yuan quota for ultra-long special treasury bonds to fund stimulus programmes and issued another 500 billion yuan in debt to recapitalise major state banks. The local special bond quota was set at 4.4 trillion yuan.
Special debt is not included in budget deficit calculations.
EMPLOYMENT
China generated 12.67 million new urban jobs last year and posted a 5.2% full-year unemployment rate.
Citi economists expect a target to create more than 12 million new jobs this year, the same as the goals of the previous two years.
The country will have 12.7 million college graduates this year, a new record high.
INFLATION
Economists expect the inflation target to remain at around 2%, but in practice, markets see it as a ceiling rather than a goal. The country has experienced strong deflationary pressures since the pandemic.
Consumer prices rose 0.2% year-on-year in January, cooling from a 0.8% increase in December.
($1 = 6.8824 Chinese renminbi)
(Reporting by Ellen Zhang and Marius ZahariaEditing by Shri Navaratnam)
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