China’s slowing economy has stoked chatter among economists that Beijing is moving closer to unleashing fresh monetary and potential fiscal stimulus measures as soon as next quarter.
There are increasing concerns over growth among the leaders, said Zhiwei Zhang, chief China economist at Nomura, citing discussions at the State Council’s weekly meeting on Wednesday.
In a statement following the meeting, Premier Li Keqiang said the government should roll out measures as soon as possible to stabilize growth and boost domestic demand, according to state news agency Xinhua.
“This reinforces our view of policy easing picking up in the second quarter,” Zhang said.
Nomura expects the People’s Bank of China (PBoC) will cut banks’ reserve requirement ratio (RRR) – or the amount of cash they must set aside as reserves – by 50 basis points in the second quarter and by another 50 basis points in the third quarter.
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