People's Bank of China forecasts growth for 2016 at 6.8%

BEIJING - China’s central bank has officially set its baseline forecast for 2016 GDP growth at 6.8%, maintaining a positive outlook despite continued downward pressure on the nation’s economy. This forecast indicates a slight decrease from the 6.9% projection for 2015, but takes into account that pro-growth measures adopted by the Government will come into effect early in 2016 to help mitigate the slowdown.

A working paper released by the People’s Bank of China (PBOC) cites overcapacity, profit deceleration, and rising non-performing loans as major drags on the economy, yet highlights a number of positive factors - including the recovery of real estate sales, lagging effects of macro and structural policies and some modest improvement in external demand - that could help resist downward pressure.

 The paper said: “Based on our models … fiscal and monetary policy changes will have their best effect on the real economy after five to nine months, and China’s pro-growth measures will start to show stronger effects in the fourth quarter of 2015, or the first half of 2016. www.webershandwick.cn (ATI).