35.6 C
Dubai
Monday, May 12, 2025
spot_img

China reduces primary interest rate to bolster economy

China’s central bank cut a key interest rate to counter COVID-induced growth slowdown in the second-largest global economy. Labour market uncertainty and global economic sluggishness have hindered activity, weakening demand for Chinese goods.

The struggling real estate sector, with major developers facing bankruptcy and project delays, adds to growth challenges.

Following a recent similar move, the central bank lowered the one-year loan prime rate from 3.55% to 3.45%, aiming to stimulate economic activity.

The five-year LPR for mortgage pricing remained at 4.2%. These historic lows are intended to encourage more favorable loans from commercial banks.

This action goes against the trend of rising global interest rates aimed at curbing inflation. China’s post-COVID recovery, since the end of 2022, has lost momentum. Household loans hit a 2009 low, indicating a faltering recovery.

The central bank also reduced its medium-term lending facility rate and regulators discussed “financial support” to manage risks.

Analysts expected a more substantial LPR cut, and market response was unenthusiastic, with Hong Kong and Shanghai stocks falling.

The central bank’s decision coincides with property giant Country Garden’s crisis and ongoing growth challenges tied to consumption, labor market uncertainty, and global economic slowdown.

Amidst grim figures, officials face pressure to introduce an economic recovery plan, though Beijing’s cautious approach due to debt concerns is evident. Authorities are focusing on supporting the private sector and consumption.

The economic slowdown threatens the five-percent growth target, with Beijing defending its ability to sustain global growth despite Western skepticism.

Next Article

Related Articles

Emirates Elevates to New Heights: Becomes the World’s Most Profitable Airline

Emirates has officially become the world’s most profitable airline, surpassing major global competitors with a combination of innovation, strategic growth, and operational excellence. The Dubai-based...

Global Rankings Leader U.S. News & World Report Enters India with Investment in The Red Pen

With a growing appetite for international education among Indian students, this new partnership is set to reshape how families approach global admissions. For years, The...

Trinity Car Rental Boutique Partners with Dubai Police Academy and MOI to Drive Innovation and Sustainability

Dubai, UAE – Trinity Rental, a leading luxury car rental boutique in Dubai, is proud to announce its collaboration with the Dubai Police Academy...

Age Is Just the Beginning: How Hardik Dewan Is Transforming Youth Potential into Power

The Teenager Who’s Already Shaping India’s Future At an age when most are still figuring out college applications or their first internships, Hardik Kumar Dewan...

From Ocean Waves to Cityscapes: How Furquan Ahmed & Marine Group are Reshaping Lucknow

Some journeys begin with a well-thought-out plan. Others, however, are born from bold choices and an unwavering belief in oneself. For Furquan Ahmed, it...

Latest Articles