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Economic Daily News: China expected to further cut interest rates

Economic Daily News: China expected to further cut interest rates

China's central bank further lowered the country's key interest rates this week. The move signifies that the Chinese government can no longer put up with the economy's downtrend. According to the latest forecast by China's National Development and Reform Commission, China's economic growth will likely be around 7 percent in the first quarter of this year, down at least 0.3 percentage points from the fourth quarter of last year. China's economic growth has continued to slow mainly due to excess capacity and sluggish international demand. A recent correction in the property market has worsened the problem. Efforts by the Chinese government to promote economic transformation have not achieved the desired effects, but have instead created considerable deflationary pressure. In January, China's consumer price index dropped to below 1 percent, while the producer price index further fell to -4.3 percent. At present, deflation is the most serious problem facing China's economy. In order to prevent the problem from worsening, stabilizing growth has become China's priority. There is room for China to further cut interest rates and the required reserve ratio by the end of this year. (Editorial abstract -- March 7, 2015) (By Y.F. Low)


Updated : 2021-09-19 20:31 GMT+08:00