Economists Maintain China Growth Forecasts Due to Stimulus Hopes

(Bloomberg) -- Economists surveyed by Bloomberg maintained their forecasts for gross domestic product growth in 2019, as they expect the government to roll out more stimulus amid a re-escalating the trade war with the U.S.

The economy will expand by 6.3% in 2019, according to the median of 66 replies in the survey, unchanged from the previous result. Analysts raised their expectations for average inflation this year to 2.2%, up by 0.1 percentage point from April's survey, but still below the government’s 3% target.

The expectation for growth to be stable comes even with the economy losing steam in April and the U.S. and China imposing further tariffs. President Xi Jinping this week called for a "new Long March", and good preparation for "all sorts of difficulties," indicating the leadership’s concerns over the economic stability amid the worsening trade war.

"The negative impacts of trade disputes are likely to be mitigated by more aggressive fiscal policies through tax and fee cuts," Gary Wan, an economist at Dah Sing Bank Limited in Hong Kong, said in the survey. "Supports from monetary policy will be targeted at private enterprises and small to micro firms. The central bank is expected to refrain from an outright easing bias to avoid adding pressure on the yuan."

For the full results of the survey, click here.

To contact Bloomberg News staff for this story: Miao Han in Beijing at mhan22@bloomberg.net;Cynthia Li in Hong Kong at cli205@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger, Enda Curran

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With assistance from Bloomberg