China is setting a 5% GDP growth target for 2026, maintaining the same figure as this year, as government advisers and analysts indicate. This ambitious target aims to address ongoing economic challenges and deflationary pressures while aligning with the upcoming five-year plan. The publication provides the following information:
Government's 5% Growth Target
The 5% growth target reflects the government's commitment to maintaining expansive fiscal policies and monetary easing. Policymakers are under pressure to stimulate the economy, which has been struggling with deflation for an extended period. The target is being formulated in private discussions and is closely linked to the initiation of the 15th five-year plan, which aims to recalibrate economic growth after years of strain.
Strategic Shift Towards Household Consumption
Chinese leaders have indicated a strategic shift towards enhancing household consumption and implementing structural changes in the economy over the next five years. However, advisers caution that these changes will take time to materialize, necessitating a continued focus on immediate government spending and central bank interventions.
Advisers' Perspectives on Growth Target
While most advisers support the 5% growth target, a minority suggests a slightly lower range of 4.5% to 5%. The final decision on the target is expected to be made at the Central Economic Work Conference later this month, where the economic priorities for the upcoming year will be established. The official growth target will be publicly announced in March during the annual parliament meeting.
As China sets a 5% GDP growth target for 2026, businesses are facing challenges from delayed tariff effects that could impact their operational strategies. For more details, see the full article on the tariff effects.
