As COVID limitations put a strain on the second largest economy in the world, China has hinted that it may miss its annual economic growth target.
The top policy-making body of the ruling Communist Party, the Politburo, stated on Thursday that it seeks to maintain growth within “a acceptable range.”
It made no mention of the earlier set official growth target of 5.5 percent.
China is still enforcing its zero-Covid policy, which has resulted in complete or partial lockdowns of key cities.
The 25-member Politburo, which is presided over by President Xi Jinping, said in a statement following its quarterly economic conference that leaders would “strive to achieve the greatest results possible.”
It also urged the stronger provinces to aim toward achieving their growth objectives.
Although economists had before projected it would be challenging for China to attain its 5.5 percent target, analysts said the absence of a GDP statement was striking.
According to Iris Pang, senior economist for China at ING Bank, “the 5.5 percent GDP target is no longer a must for China.”
They also mentioned that China was pressing the bigger provinces to compensate for the smaller ones that were more severely impacted by the shutdown.
Beijing recommended that reasonably well-positioned provinces work to meet their economic and social goals for this year, according to a note from Nomura analysts Ting Lu, Jing Wang, and Harrington Zhang.
In particular, those provinces that were severely impacted by the Omicron variation and lockdowns, “we believe Beijing is hinting that GDP growth targets for provinces with less favorable conditions should be more flexible.”
China reported earlier this month that the second quarter of this year saw a significant decline in its GDP.
Large Chinese cities, notably Shanghai, the country’s principal manufacturing and financial center, were either completely or partially placed under lockdown at this time.
Home sales have decreased for 11 straight months in China’s once-booming real estate sector, which is also experiencing a severe downturn.
Due to worries about cash flow, a number of Chinese developers have put a stop to the construction of homes that have already been sold.
Some homebuyers have threatened to cease making mortgage payments in recent weeks until the work picks back up.
In view of the epidemic, China made the unusual decision to abandon its GDP targets in 2020.
GDP is a gauge of economic size. Economists and central banks regularly monitor the economy’s expansion or contraction as one of the most crucial indicators of how well or poorly it is doing.
Additionally, it assists firms in determining when to grow and hire more employees or invest less and reduce their workforces.