China sets 2024 GDP growth target at around 5%, same as last year

BEIJING, March 5 – China has set an economic growth target for 2024 of around 5%, similar to last year’s goal and in line with analysts’ expectations, according to an official work report released on Tuesday.

To meet the goal, China plans to run a budget deficit of 3% of economic output, down from a revised 3.8% last year, the report said. But crucially, it plans to issue 1 trillion yuan (USD 139 billion) in special treasury bonds, which are typically not included in the budget.

The National People’s Congress (NPC), China’s rubber-stamp parliament, is due to hear Premier Li Qiang’s maiden work report at its annual meeting in Beijing this week.

The report sets out the government’s key economic and social development goals each year.

The special bond issuance quota for local governments was set at 3.9 trillion yuan, versus 3.8 trillion yuan in 2023, the report said.

China also set the inflation target at 3% and aims to create over 12 million urban jobs this year, keeping the jobless rate at around 5.5%.

China’s economy expanded 5.2% in 2023, but it remains heavily reliant on credit-driven, state-led investment, raising concerns over whether it can sustain that pace in the longer-term.

This year’s target will be harder to reach than last year’s because the favorable base effect from a COVID-hit 2022 has faded, analysts say.

A property crisis, deepening deflation, a stock market rout, and mounting local government debt woes are putting great pressure on China’s leaders to take momentous policy decisions that will put the economy on a solid footing for the long-term.

Analysts expect China to lower its annual growth ambitions in the future as it needs to make tough calls on how to fix these deep structural imbalances.

Reform advocates, worried about record low consumer confidence and plunging investor and business sentiment, want China to return to a path of pro-market policies and boost household demand.

The NPC is not the traditional venue for sharp policy shifts, which are usually reserved for events known as plenums, held by the Communist Party between its once-every-five-year congresses.

One such plenum was initially expected in the final months of 2023. While it could still take place later this year, the fact that it has not yet been scheduled has fueled investor concerns over policy inaction.

The International Monetary Fund projects China’s economic growth at 4.6% this year, declining further in the medium term to about 3.5% in 2028.

(Reporting by Beijing newsroom; Writing by Marius Zaharia; Editing by Leslie Adler, Neil Fullick and Lincoln Feast.)