China needs to boost its economy “more aggressively” before markets are persuaded to expect growth to pick up, a portfolio manager said.
Amid skyrocketing costs and the stifling heat in China, which caused electric power rationing in a few provinces, the growth of the nation’s economy will be influenced by this unfortunate phenomenon.
During the show, Street Signs Asia on CNBC, she said, After the lockdown in Shanghai, we thought that the worst was behind us.
However, she added, “possibly… with the concerns about inflation and the looming heatwave, it might mean that policymakers will have to move a little more decisively and enhance some of the stimulus.”
The government has so far lowered interest rates and supported the real estate industry with targeted actions.
The progress China has made is noteworthy, but there needs to be a more dramatic step forward to give the market more assurance that its GDP will go up.
She claimed that despite the measures taken by the authorities, China’s growth hasn’t been as robust as anticipated and that more has to be done.
If growth slows, authorities will need to take more prompt and decisive action than what has been seen thus far to relieve some of the strain on growth, she said.
There was reduced Chinese growth due to these measures and large investment firms such as Goldman Sachs and Nomura revised China’s forecast for this year.
Senior government officials disavowed the goal of approximately 5.5% growth in the second half of the year, saying they would rather have low prices and high employment.
China’s GDP rose by 0.4% in the second quarter this year compared to the same period last year.